HP switches key executives, dashes hopes for 2014 revenue growth
By Edwin Chan
SAN FRANCISCO (Reuters) - Hewlett-Packard Co shuffled its top ranks on Wednesday, reassigning a star executive to a new role identifying potential acquisitions, as the world's largest personal computer maker reported a larger-than-expected slide in revenue and forecast zero sales growth next year.
Its shares dropped 5 percent in after-hours trading.
The Silicon Valley stalwart, which has been undergoing a radical reshaping under Chief Executive Meg Whitman for the past two years, is looking for ways to escape the decline in PC sales as tablets and smartphones revolutionize computing.
Whitman, who said in May that fiscal 2014 revenue growth was still possible, told analysts on a Wednesday conference call that growth next year was now "unlikely" given the poor performance of the Enterprise Group and PC divisions.
"My read was that fiscal 2014 growth was a stretch goal rather than a baseline assumption," said Shebly Seyrafi, an analyst at FBN Securities. "That has become more challenging."
To meet that challenge, Whitman made a key personnel move on Wednesday, replacing Dave Donatelli with Bill Veghte at the helm of HP's second-largest business division, the Enterprise Group.
Donatelli, a rising star that Wall Street analysts once considered a candidate for a tech CEO position, relinquishes his post as chief of the unit, which sells server, storage and software services to large organizations. He will now focus on identifying early-stage technologies for investment, the company said.
The executive engineered some of the company's most significant acquisitions in past years, including of 3Com and 3PAR, which helped catapult HP deeper into the networking and storage markets, respectively. Continued...