Update: Hewlett-Packard Expects to Hit Earnings, Revenue Targets

Updated from 12:09 p.m. EDT

Hewlett-Packard(HWP) reassured Wall Street Friday that it expects to hit earnings and revenue targets for the fourth quarter, and at the same time announced plans to buy back $1 billion in shares.

The Palo Alto, Calif.-based computer maker said it anticipates a 15% rise in revenue and earnings of $1.03 a share for the fourth quarter, in line with analysts' estimates.

H-P's board also said Friday that Carly Fiorina has been named to the additional position of chairman, succeeding Richard Hackborn, who will remain as a member of the board. Fiorina, meanwhile, will continue as president and chief executive of the firm.

Shares of H-P closed up $8.94, or 9%, to $103.94 in midday trading, on a day when technology stocks are struggling following a revenue warning from chipmaker Intel(INTC).

The plan to repurchase shares, approved by the company's board of directors, comes in addition to an ongoing repurchase program, according to the company.

In a statement, Hackborn said of Fiorina's new duties: "This appointment is a strong vote of confidence in Carly's leadership and the direction she has set for the company over the past 14 months.

"Under her stewardship, the company is now poised for accelerating growth."

Earlier this month, the company said it was mulling a bid to acquire the consulting arm of PricewaterhouseCoopers for $17 billion to $18 billion, an announcement that drove H-P's stock down 6% in one day. The deal, if successful, would slice into earnings in fiscal 2001, the company estimated at the time.

But stronger technology consulting services would complement H-P's hardware business, and a pact between the two would likely push H-P's revenue growth beyond 15%, the company has said. It is not expected to affect earnings in fiscal 2002.

In a move related to the negotiations, H-P has decided to take on Ernst & Young as its independent auditor, dismissing PricewaterhouseCoopers in order to pave the way for a deal, said Dave Berman, a spokesman for H-P.

The sale of PricewaterhouseCooper's consulting business was widely expected, since the Securities and Exchange Commission has pressured companies to separate their auditing and consulting units to avoid any conflicts of interest.

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