New HP CEO Expected To Signal Strategic Direction In Q4 Call


New HP CEO Leo Apotheker is expected to give a glimpse into the strategic direction he expects to take the computer giant during the company's fourth fiscal quarter earnings call on Monday.

"While still less than a month into his new role, we expect Mr. Apotheker to discuss the ongoing transformation of technology and how HP’s broad hardware and services portfolio places the company at a competitive advantage," said Brian Alexander, an analyst for Raymond James in a research note to clients. "We hope to gain more clarity on his views of HP’s software assets and whether he believes the company should direct its focus toward applications/middleware and have more of a presence in the traditional software stack."

Alexander expects HP to post better than expected results with the company topping consensus earnings estimates of $1.27 per share by an additional two or three cents for its fourth fiscal quarter ended Oct. 31. He expects HP to top consensus revenue estimates by an additional $200 million to $400 million.

"Consumer PCs have been weak; however, robust global commercial demand and favorable currency movements (one percent tailwind) should be an offsetting factor," said Alexander who has a strong buy on the stock.

HP solution providers are also looking for signs of Apotheker's channel philosophy during the conference call.

"It is very important that Apotheker address the Channel early, because of the role that it plays in HP's overall business," said one top HP partner, who did not want to be identified. "The channel is HP's strategic partner in its battle against its competitors. It would be no different than a new President being elected in the U.S. and one of the first things he/she does is pick up the phone can call Great Britain. I fully expect that will be high on his agenda."

Gregory Spierkel, chief executive officer of Ingram Micro, one of HP's top distribution partners, said in a recent interview that he expects Aptheker to be "very supportive" of the channel.

"I've known Leo personally for the last three years," said Spierkel. "He's been a very supportive CEO, and before that a supportive head of customer services. He will bring a great background to HP."

"I think he's going to bring good things to HP. SAP was not overly channel-centric," said Spierkel. "But I think he's going to be responsive. He's a very good listener to what the customers need."