HP delivers a mixed bag for Q3 amid big leadership changes

CEO Meg Whitman is consolidating the marketing and communications groups, among other movements in the C-suite.
Written by Rachel King, Contributor

Revenue drops and executive changes were all expected to be on deck as Hewlett-Packard reported third quarter earnings after the bell on Wednesday.

See also: HP: Q3 likely to show more revenue erosion

The tech giant reported a net income of $1.4 billion, or 71 cents per share (statement).

Non-GAAP earnings were 86 cents per share on a revenue of $27.2 billion.

Wall Street was expecting HP to report a third quarter non-GAAP profit of 86 cents a share on revenue of $27.3 billion.

HP shares slipped slighly by 2.5 percent in after-hours trading.

CEO Meg Whitman looked at the glass half full (translation: hitting the EPS target) in prepared remarks:

We once again achieved the financial performance we said we would, delivering $0.86 in non-GAAP diluted earnings per share, within our previously provided outlook of $0.84 to $0.87. I remain confident that we are making progress in our turnaround. We are already seeing significant improvement in our operations, we are successfully rebuilding our balance sheet, our cost structure is more closely aligned with our revenue and we have reignited innovation at HP, with a focus on the customer.

Here is how Q3 revenue results played out by department, and at least one pattern is fairly obvious here:

  • Personal Systems: Down 11 percent, year-over-year
  • Printing: Down four percent, year-over-year
  • Enterprise Group: Down nine percent, year-over-year
  • Enterprise Services: Down nine percent, year-over-year
  • HP Financial Services: Down six percent, year-over-year
  • Software: Up by one percent, year-over-year

For the fourth quarter, Wall Street is expecting revenue of $28.12 billion with earnings of at least $1.01 per share.

HP's Bill Veghte

In Wednesday's report, HP provided guidance for fiscal 2013, projecting earnings to fall between $3.53 and $3.57 per share.

HP shuffles the deck

Earlier in the day, it was also reported that some executive reassignments were on the way and expected to be announced publicly amid Wednesday's report. Names in the mix included chief marketing officer Marty Homlish and Dave Donatelli, head of the enterprise group at HP.

Shortly after the Q3 report hit the wires, HP publicly confirmed the leadership changes. Here's how everything shakes out:

  • HP's chief operating officer Bill Veghte is taking over as executive vice president and general manager of the enterprise group. That role is being expanded to include oversight for HP's cloud portfolio.
  • That unit's previous leader, Dave Donatelli, is moving onto a "new role" focused on identifying early-stage companies with new technologies similar to Moonshot and StoreOnce. He will continue to report to Whitman.
  • HP is combining its marketing and communications teams into one big group led by current CMO Marty Homlish. His new title is "chief customer experience officer." The new role has been set up to focus on "driving more consistent and high-value interactions with customers across all business units."
  • Chief communications officer Henry Gomez take over for Homlish as chief marketing officer, although he will be responsible for overseeing both marketing and communications initiatives.

One piece of the puzzle that still looks missing: HP said that there are "currently no immediate plans to select a new COO after Veghte transitions to his new role."

Slides via HP Investor Relations

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