HP sales slump; reshuffles its deck

Fiorina said HP (NYSE:HWP) results had been hurt by weaker-than-expected performance in personal computers and by certain problems with its sales execution.

At the same time, Fiorina announced several changes to upper management designed to put more resources in key areas and pull together different business units. She said Ann Livermore, a top executive who had largely designed the company's Internet strategy, would be in charge of three key areas including its e-services operation.

The Enterprise division will be consoldiated under Duane Zitzner, who heads the company's computer product division. The company's inkjet and laser-jet printer divisions will also be consolidated, said Richard Chu, an analyst at S.G. Cowen Securities Inc., in Boston.

Antonio Perez, who had run the inkjet imaging solutions division, will now be in charge of digital imaging and consumer branding for the company, Chu said.

"It looks like they effectively consolidated ... control for product functions from four to two (executives) and put two senior executives in place who can spearhead more structured customer selling," Chu said. "It makes sense to focus on the two major businesses and give them more flexibility. I'm enthusiastic about the tone she's seetting."

In announcing the earnings forecast, Fiorina said several parts of the business remained strong but the recent earthquake in Taiwan has increased the likelihood of some disruption or delay in its supply chain.

Addressing the weak sales execution, Fiorina said she would institute an "entirely new incentive-based" compensation model on Nov 1.