A peek at earnings, and other questions about HP

HP‘s earnings report, due after the stock markets close today, will cover the first full quarter since Meg Whitman became CEO.  The results from the world’s largest PC maker will come a day after rival Dell disappointed with its earnings and outlook. They also come a month after a couple of research firms said HP saw a big drop in demand in the fourth quarter, with analysts reportedly citing confusion over Hewlett-Packard’s PC business as a factor.

Before Whitman was named CEO in September, her predecessor, Leo Apotheker, had indicated the month before that the Palo Alto company was considering spinning off or selling its PC business, among other things. Apotheker’s attempt to go Big Blue got him nothing but a big black eye. He was fired after less than a year on the job. One of the first things Whitman, the former eBay CEO and California gubernatorial candidate, did after she took the helm was vow to stick with the PC business.

Whitman has also said HP will keep developing webOS, which it owns as part of its $1.2 billion purchase of Palm in 2010. HP’s webOS-based hardware, including the TouchPad, was short-lived. (Apotheker killed it after it failed to gain quick traction against Apple‘s iOS and Google‘s Android.) Along with her forecast for the current quarter, analysts will be listening closely to what Whitman says today about the future of webOS. Brandon Bailey of the Mercury News reported over the weekend that the software, which HP has made open source, may find new life in specialized automotive, industrial or medical equipment. But after comments Whitman made last week, might she still see webOS as a viable competitor in the cutthroat mobile-device industry? She reportedly suggested Google’s purchase of Motorola Mobility could lead Android away from open source, a common concern Google has disputed. And by the way, don’t you know it, webOS is open source.

But back to PCs. Other possible factors that could have hurt HP’s business include last year’s floods in Thailand, which disrupted the tech supply, and competition from the fast-growing tablet industry. Analysts expect HP to report profit of 87 cents a share on $30.7 billion in revenue. Its shares are down more than 2 percent to $28.96 as of this post. Dell’s shares are sinking more than 6.5 percent to about $17.


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