PALO ALTO, Calif. (
) -- The surprises linked to new
CEO Leo Apotheker keep coming. First, there was the board's decision to appoint him for the chief spot --
seemingly out of the blue
. Then there's his sense of humor, which bubbled up Monday in response to a question asked by
Like some Silicon Valley version of "Where's Wally?" the HP supremo's whereabouts have been a source of intense debate after
attempt to subpoena Apotheker to appear in its
in northern California.
Oracle is seeking billions of dollars in software theft-related damages from SAP, where Apotheker was formerly CEO. Oracle's subpoena efforts have proved unsuccessful, prompting speculation HP was keeping him well
During a media conference call Monday to discuss HP's fourth-quarter results,
asked Apotheker where he was making the call from. "That's an odd question -- you mean, physically, right now?" asked Apotheker. "I'm on the media call concerning our fourth-quarter in Palo Alto at HP's headquarters together with a bunch of people.
"Would you like a picture?"
With Oracle's SAP case now at the jury stage, the threat of a subpoena-waving
chasing Apotheker around Palo Alto has disappeared. As such, the new HP CEO shrugged off Oracle's antics during his conference call with the media. "A competitor" has attempted to distract HP, but the firm remains focused, he said.
Minutes before the call,
, blowing past Wall Street's revenue and earnings estimates and giving healthy guidance.
did last week, the No. 1 PC maker noted that enterprises are spending, overhauling their IT gear. That means HP is ramping up the pressure on sector rivals
HP's networking business grew 50% compared to the prior year, thanks partly to the firm's acquisition of
. Revenue from HP's enterprise storage and servers (ESS) division grew 25%. "We continued to see momentum in the commercial sector," said Cathie Lesjak, HP's CFO, during a conference call with analysts on Thursday. "The enterprise refresh continues."
Revenue from the company's PC group grew 4% year-over-year, although notebook revenue was down 3%; HP cited weakness in the consumer market. Sales from HP's printers division increased 8% year-over-year.
"We see the growth in networking, servers, storage and printers as a sign that HP is either gaining share or stemming share loss in those markets," said Kaushik Roy, an analyst at Wedbush Morgan, in a note released on Tuesday. "We expect investors to react positively to the report, gaining confidence in HP's ability to execute."
HP shares crept up a penny, or 0.02%, to $43.26 on Tuesday, although this helped to reverse the broader tech sector selloff that saw the Nasdaq fall 1.82%.
Roy, who maintained his outperform rating and $50 HP price target, believes that HP has the ability to hit the high end of its earnings guidance for fiscal 2011. HP expects fiscal 2011 earnings between $5.16 and $5.26, although this includes a one-time gain of 4 cents a share related to real estate. Analysts surveyed by Thomson Reuters had forecast earnings of $5.11.
Regarding the future of innovation at HP, Apotheker's comments marked a deviation from the cost-cutting path his predecessor CEO, Mark Hurd, was known for. Apotheker said that HP will be increasing its R&D spending. The company's R&D outlay grew to $814 million from $704 million in the prior year's quarter, and Apotheker said that savings from HP's ongoing efforts to streamline its business will fund additional research.
"There is always an opportunity to drive more productivity," he said on the call. "We will use some of the savings that we generate from our efficiency initiative to invest more in R&D."
--Written by James Rogers in New York.
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