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HP transformation: reference guide to today’s news and 3Q11 earnings report

Along with third quarter 2011 financial results, HP today announced a transformation designed to better position the company for the future by narrowing its focus on its strategic priorities of cloud, solutions, and software.

 

First, we are making a strategic investment in innovation by way of a recommended all-cash offer for the issued and to be issued shares of Autonomy Corporation plc, a leading global software business headquartered in Cambridge, UK and San Francisco, USA.

 

Second, we will focus HP on fewer fronts to further concentrate on the markets that offer the best opportunities for profitable growth and shareholder returns.  As part of this effort, HP has decided to discontinue webOS hardware device operations.  We will explore options for the webOS software platform.

 

Third, HP has authorized the exploration of strategic alternatives for its Personal Systems Group, which may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction.

 

“HP is taking bold, transformative steps to position the company as the leader in the evolving information economy,” said HP CEO Léo Apotheker.  “Today's announced plan will allow HP to drive creation of long-term shareholder value through a focus on fewer fronts, thereby improving its ability to execute, invest in innovation and drive a higher-margin business mix."

 

HP also announced the promotion of John Visentin to become the new head of its Enterprise Services division, which delivers technology infrastructure, applications, and business services.  Visentin will report to the CEO.

 

HP held a live audio webcast of its conference call to review its financial results and the company transformation on Thursday, Aug. 18 at 5 p.m. ET/2 p.m. PT.  A replay will be available at http://www.hp.com/investor/2011Q3webcast.

 

Stay updated with further news as it becomes available by following @hpnews on Twitter, the HP.com Newsroom, and our investor relations website.

 

 

Use of non-GAAP financial information

To supplement HP's consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter and prior periods is included in the tables below. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP management compensates for those limitations, and the substantive reasons why HP management believes that these non-GAAP measures provide useful information to investors is included under "Use of Non-GAAP Financial Measures" after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for operating profit, operating margin, net earnings, diluted earnings per share, or cash and cash equivalents prepared in accordance with GAAP.

 

Forward-looking statements

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections of revenue, margins, expenses, earnings, tax provisions, cash flows, benefit obligations, share repurchases, currency exchange rates, the impact of acquisitions or other financial items; any statements of the plans, strategies and objectives of management for future operations, the exploration of strategic options for HERMES and the execution of cost reduction programs and restructuring and integration plans; any statements concerning the expected development, performance or market share relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending business combination transactions; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the impact of macroeconomic and geopolitical trends and events; the competitive pressures faced by HP's businesses; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by HP and its suppliers, customers and partners; the protection of HP's intellectual property assets, including intellectual property licensed from third parties; integration and other risks associated with business combination and investment transactions; the hiring and retention of key employees; assumptions related to pension and other post-retirement costs; expectations and assumptions relating to the execution and timing of cost reduction programs and restructuring and integration plans; the possibility that the expected benefits of pending business combination transactions may not materialize as expected or that the transactions may not be timely completed; the resolution of pending investigations, claims and disputes; and other risks that are described in HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2010 and HP's other filings with the Securities and Exchange Commission, including HP's Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2011. As in prior periods, the financial information set forth in this release, including tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts in HP's Form 10-Q for the quarter ended July 31, 2011. In particular, determining HP's actual tax balances and provisions as of July 31, 2011 requires extensive internal and external review of tax data (including consolidating and reviewing the tax provisions of numerous domestic and foreign entities), which is being completed in the ordinary course of preparing HP's Form 10-Q. HP assumes no obligation and does not intend to update these forward-looking statements.

Labels: Financial
Comments
david massing(anon) | ‎08-19-2011 06:23 AM

I am dissapointed that you have dropped webos hardware and support. I was devoted to making my laptop purchase from your company for my culinary degree. I was very much ready to change all my computers and tablets as hp hardware. Now I will definatley be looking to another company for all my computer needs due to this very sad news about webos devices.you are the company that should have prompted the greatest of smartphones and tablets and made webos devices available to the masses and surpass the market shares in your favor. You just lost a very good potential customer.
David Massing

Ryan webOS Fan(anon) | ‎08-19-2011 08:56 AM

I want webOS. Why did you have to even buy it in the first place if you were going to kill it!

Jim OSullivan(anon) | ‎08-19-2011 01:31 PM

well, I feel ripped-off and betrayed. My seven WEEK old TouchPad will probably never have the ability to edit word or excel documents and will probably never see the full capabilities of touch to share. Can I get my money back?

diane hill(anon) | ‎08-19-2011 08:38 PM

 

 

After 6 weeks of owning this touchpad, I learn you won't be supporting WebOS any more.  Come on, what a joke you've become.  I will no longer be buying HP ANYTHING like I have for the past 15 years.  You and QVC should refund our money for the best thing I've seen come from HP.   Shame on you all

Cam(anon) | ‎08-19-2011 10:11 PM

How does a 20% reduction in share value make you all feel? I really hope you didn't feel that this was a good move. You were the largest PC manufacturer in the world, and you decide you don't want to have anything to do with it anymore? You have a great product in webOS, and you just aren't going to support it anymore? I'm sorry, but as a person of logic, I fail to find any here.

Ethan_Bauley | ‎08-23-2011 09:14 PM

Hi everyone -

 

We've posted answers to many of your questions about webOS and PC's at our other blog, The Next Bench:

 

http://h20435.www2.hp.com/t5/The-Next-Bench-Blog/Answering-your-Questions/ba-p/68619

 

We'll keep you posted as we get more information.

 

Best,

 

Ethan

HP Communications

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