The world doesn't stop just because a CEO gets kicked in the duff. And so the sun keeps rising in the east, chocolate is still the only candy worth eating, and Hewlett-Packard (NYSE: HPQ) reported third-quarter earnings Thursday night, even after Mark Hurd got unceremoniously dumped out of the CEO chair.
Interim CEO and full-time CFO Cathy Lesjak had the mixed blessing of handling this report. Revenue rose 11.4% year over year, to $30.7 billion, helped in no small part by the interim acquisition of networking expert 3Com (and much less by the Palm buyout that closed midway through the quarter). GAAP earnings grew slower than sales, making the move from $0.69 per share to $0.75 per share.
The HP conglomerate was held back by slow growth in the services division, but helped by raucous sales of enterprise computing systems and printers. Whoever takes the rudder of this battleship will have market leadership in enterprise computing and printers to fall back on while figuring out how to light a fire under the services segment and the consumer business.
The business-to-business focus shows up clear as day when you look at the breakdowns of HP's divisions. For example, desktops sold much faster than laptops, which only makes sense if you figure that most of the systems were destined to become corporate workstations.
This is probably a good sign for other enterprise-friendly hardware and software vendors, too, including chief rival IBM (NYSE: IBM), recent conglomerate wannabe Oracle (Nasdaq: ORCL), and the ever-present Microsoft (Nasdaq: MSFT). My thinking is that Windows 7 conversions are finally gaining speed in the business world, which should drive sales for all of the companies I just mentioned for the foreseeable future.
HP imaging and printing VP Vyomesh Joshi bragged about the best product portfolio in the past six years, because "from an innovation point of view, we are on fire." When Palm's WebOS software starts rolling out in his new printers, I might believe that -- for one division only. The rest of HP still needs to prove to me that there's gas left in the innovation tank after a decade of mismanagement.
Would you buy HP stock on the cheap these days, or is it better to wait until the company gets permanent leadership? Discuss in the comments section below.
