Analysts express some optimism about Hewlett-Packard after CEO Hurd’s surprise resignationBy AP
Monday, August 9, 2010
Ahead of the Bell: Hewlett-Packard
NEW YORK — “Still a ‘Buy’” is how one analyst summed up his sentiment on Hewlett-Packard Co. following CEO Mark Hurd’s stunning resignation Friday following allegations that he falsified expense reports to conceal a relationship with a former contractor.
Investors seemed to agree, pushing shares of the world’s largest technology company up $1.21, or 2.9 percent, to $42.96 in premarket trading Monday.
Collins Stewart analyst Louis R. Miscioscia, said while it’s difficult “not to be highly disappointed,” a sharp after-hours decline in HP’s stock was “overdone.”
“HP is no longer in turnaround mode and given the 3-4 year track record of operational success, we would not expect a disruption in fundamentals or operations over the next 6-12 months,” the analyst wrote in a note to investors.
Through relentless cost cuts — including 40,000 jobs — as well as a series of targeted acquisitions, Hurd transformed HP from a computer and printer maker that relies on profit from printer cartridges into a major tech industry player in technology services and other areas.
What HP needs now, Miscioscia said, “is a leader with diverse skills in three major areas: marketing/sales, operational excellence and technology vision.”
Kaufman Bros. analyst Shaw Wu said while Hurd’s resignation is disappointing, the cultural change he helped shape at HP — which made it much more competitive company — will stay intact.
Janney Capital Markets analyst William Fearnley Jr. said though he still likes HP’s worldwide reach and leadership position in several technology sectors, the events “will cast a shadow over the story and the stock until a new CEO is chosen.”
Tags: Expense, Expense reports, New York, North America, Personnel, United States