|"Only dull people are brilliant at breakfast"
|"The liberal soul shall be made fat, and he that watereth, shall be watered also himself."
-- Proverbs 11:25
Shares of Hewlett-Packard rose Wednesday after the company’s results beat Wall Street’s expectations, and the tech giant unveiled a plan to cut 27,000 jobs.
In a call with analysts, Chief Executive Meg Whitman said, “Overall I feel cautiously optimistic coming out of Q2. Our results appear to be stabilizing. While I wouldn’t say we’ve turned the corner, we are making progress.”
The Palo Alto, Calif.-based company reported a fiscal second quarter profit of $1.6 billion, or 80 cents a share, compared with a profit of $2.3 billion, or $1.05 a share, for the year-earlier period.
Revenue was $30.7 billion, down from $31.6 billion. Adjusted profit was 98 cents a share.
[snip] Analysts were expecting H-P to report earnings of 91 cents a share, on revenue of $29.9 billion, according to a consensus survey by FactSet Research.
For the current quarter, the company said it expects adjusted profit of 94 cents to 97 cents a share. Analysts were expecting $1.02 a share, according to FactSet Research.
The company also unveiled a much-anticipated plan to reduce its workforce, saying it is cutting 8% of its employees, or 27,000 positions, by the end of fiscal year 2014.
H-P said the move will lead to annual savings of $3 billion to $3.5 billion by the end of that fiscal year.
In a statement, the company said it plans to use the savings to “boost investment in innovation around its three areas of strategic focus: cloud, big data and security, as well as in other segments that offer attractive growth potential.”
The rights to 800,000 stock options will vest on Whitman's first anniversary as HP's CEO if the company's shares have closed at or above $28.31 for 20 consecutive trading days. The price target is 20 percent above the options' stock price of $23.59. That price requirement hasn't been met yet, though HP's stock has closed above $28.31 several times in the past two weeks. The shares gained 57 cents to close Friday at $29.07.
Although the stock has climbed since Whitman took over, it remains 37 percent below its price when Hurd left the company in August 2010.
Another 800,000 options will vest on Whitman's second anniversary on the job if HP's stock has closed at or above $33.03 for 20 consecutive trading days. That's 40 percent above the exercise price.
The remaining 300,000 options vest in annual increments of 100,000 on Whitman's first three anniversaries as CEO. Those awards aren't tied to HP's stock reaching a certain price.
Whitman, 55, also received more than $372,000 in additional compensation that stemmed from cash and stock grants that she received last year while she was a non-executive director on HP"s board.
This year, Whitman will be eligible for a bonus of up to $6 million to supplement her $1 salary if HP does well.
GOP presidential hopeful Mitt Romney took some time, in an interview with National Review published Thursday, to praise Hewlett-Packard chief executive Meg Whitman, who lost her 2010 bid to become governor of California. If Whitman, a Republican, had defeated Democrat Jerry Brown, Romney argued, California's finances wouldn’t be in such dire shape now and an $8.5 billion tax hike wouldn’t be on the table:The governor [Brown] is taking them in the wrong direction. I wish Californians had elected Meg Whitman. She would have been more successful and explained to Californians the need to cut back on spending and eliminate unnecessary programs. There are other states that have very different records. I think it's interesting that the state with the highest or among the highest tax rates in the nation also has the worst or near the worst deficit.