HP Hikes Earnings Guidance
Excluding items, HP now expects third-quarter earnings of approximately $1 a share, compared to its prior outlook of 94 cents to 97 cents a share. Analysts surveyed by Thomson Reuters expect HP to report earnings of 97 cents a share on revenue of $30.3 billion.
Investors welcomed the guidance hike. Weighed down by consumer spending concerns and the company's ongoing restructuring efforts, HP's shares have fallen more than 21% this year, but rose 1.79% to $19.30 shortly after market open on Wednesday.
HP also expects to record a non-cash pretax charge of about $8 billion for the impairment of goodwill within its services segment during the third quarter. Additionally, the Palo Alto, Calif.-based firm updated the amount of the third-quarter pretax charge related to its restructuring program announced in May. The company now expects to record a charge of approximately $1.5 billion to $1.7 billion, up from its prior estimate of approximately $1 billion.
"The change is primarily driven by a higher than anticipated acceptance rate under its early retirement program and faster than expected implementation of the workforce reduction program," HP said.
The No. 1 PC maker, which reports its third-quarter results on Aug.22, did not update its full-year outlook.
HP also announced personnel changes on Wednesday. Mike Nefkens, senior vice president and general manager of HP Enterprise Services (ES) in Europe, the Middle East and Africa (EMEA), will now lead HP ES on an acting basis. The previous HP ES leader, John Visentin, is leaving the company to pursue other interests, according to HP's statement.
Jean-Jacques Charhon, senior vice president and chief financial officer of HP ES, has been appointed operating chief the ES business. "Charhon will focus on increasing customer satisfaction and improving service delivery efficiency, which will help drive profitable growth," explained HP in its statement.
HP CEO Meg Whitman has implemented widespread changes since taking over from the ousted Leo Apotheker last year. In May, for example, HP announced plans to cut 27,000 jobs, 8% of its total work force as part of the company's broader restructuring plan.
While Whitman has earned plaudits for her efforts to revitalize the troubled tech giant, however, there have been calls for her to spin off the company's PC and printer businesses.
TheStreet will be live-blogging HP's third-quarter results, starting at 3:45 p.m. EDT on Aug. 22.
--Written by James Rogers in New York.
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