HP Raises 2010 Sales Forecast, But Shares Fall On Hurd Resignation News

Despite the news that Mark Hurd resigned Friday as Hewlett-Packard president and CEO, the company raised its sales and earnings forecast for fiscal 2010 and issued preliminary results for the third quarter.

The news seemed timed to reassure financial markets and HP stockholders. HP shares plunged more than 9 percent to $42.15 on volume of more than 11 million shares in after-hours electronic trading, according to MarketWatch. News of Hurd’s resignation came after the close of regular trading.

HP said it now expects revenue in the range of $125.3 billion to $125.5 billion for fiscal 2010, which ends Oct. 31. In May, when HP reported its second-quarter results, the company said it was expecting revenue growth of 8 to 9 percent for 2010, putting it in the range of $123.7 billion to $124.9 billion.

The company said it expects GAAP earnings-per-share of $3.62 to $3.64 for all of fiscal 2010.

For the third quarter that ended July 31, HP reported preliminary results of $30.7 billion in revenue, up 11 percent from $27.5 billion in the third quarter of 2009. GAAP earnings were approximately 75 cents per share in the quarter. The company expects to report final third-quarter results Aug. 19.

For the current (fourth) quarter HP is estimating revenue of approximately $32.5 billion to $32.7 billion and GAAP earnings per share in the range of $3.62 to $3.64.

’Despite its success under Hurd, TBR believes the company will weather its CEO transition,’ said Technology Business Research senior analyst Ezra Gottheil in a commentary on the news of Hurd’s resignation.

Saying HP ’remains in a position of strength,’ Gottheil pointed to the preliminary Q3 numbers and said the results ’show that not only is HP on track for continued growth with high single-digit operating margins, but also the company strategy going forward remains well in hand.’