muleman
Gone But Not Forgotten
HP said today that Chairman, President and Chief Executive Mark Hurd has resigned, effective immediately, surrounding the investigation of a sexual harassment claim. The company appointed CFO Cathie Lesjak, a 24-year veteran of the company, as CEO on an interim basis.
In a statement, the company said:
Asked specifically if the company would pursue civil charges against Hurd, Holston said that the board and Hurd entered into an agreement related to his exit. Pressed further on whether that agreement included references to civil suits, Holston replied that there has not been any litigation filed. He did not elaborate.
Holston, during his introduction of Lesjak, said that the board has ”complete confidence [in Lesjak] to lead the company during this transition.” Lesjak, 51, is a 24-year veteran of the company who has served as HP’s CFO and as a member of the company’s Executive Council since January 2007.
On the call, Lesjak, who has chosen to not be in the running for the permanent CEO job, said that she “has never been more confident in the company’s future.”
In a move to allay Wall Street concerns - Hurd was responsible for giving HP financial discipline and multiple solid quarters of performance - the company preannounced strong third quarter earnings.
The company projected earnings of 75 cents a share on revenue of $30.7 billion, up 11 percent from a year ago. Non-GAAP earnings will be $1.08 a share. Earnings were hit by a 2 cents a share charge to settle a lawsuit with the Department of Justice. Wall Street was expecting earnings of $1.06 a share on revenue of $30 billion.
For the fourth quarter, HP also raised its outlook. HP sees revenue of $32.5 billion to $32.7 billion. Earnings will be $1.03 a share to $1.05 a share. Non-GAAP revenue will be $1.25 a share to $1.27 a share.
And for the year, HP sees revenue of $125.3 billion to $125.5 billion with earnings of $3.62 to $3.64 a share. Non-GAAP earnings will be $4.49 a share to $4.51 a share. Those targets top Wall Street expectations.
The message from HP is that the company is firing on cylinders. However, Wall Street looks ahead and Hurd’s abrupt resignation is jarring. The next CEO walks into a good situation, but will have big shoes to fill.
Asked why the company chose to raise the financial outlook for the company while also announcing the resignation of the CEO, Lesjak replied that it was important to note that the Hurd’s resignation and the investigation into his actions have “nothing to do with the operational performance of the company… That’s all about Mark’s behavior and judgment.”
In a statement, the company said:
Hurd’s decision was made following an investigation by outside legal counsel and the General Counsel’s Office, overseen by the Board, of the facts and circumstances surrounding a claim of sexual harassment against Hurd and HP by a former contractor to HP. The investigation determined there was no violation of HP’s sexual harassment policy, but did find violations of HP’s Standards of Business Conduct.
The release was issued just after the financial markets closed on Friday and the company put together a brief, short-notice conference call for the press. During that call, chief counsel Mike Holston referenced a former marketing assistant, who was not employed by HP, and Hurd and also referenced improper expense reports charged to the company. He would not provide any details about the woman, noting that she has chosen to not come forward.
Asked specifically if the company would pursue civil charges against Hurd, Holston said that the board and Hurd entered into an agreement related to his exit. Pressed further on whether that agreement included references to civil suits, Holston replied that there has not been any litigation filed. He did not elaborate.
Holston, during his introduction of Lesjak, said that the board has ”complete confidence [in Lesjak] to lead the company during this transition.” Lesjak, 51, is a 24-year veteran of the company who has served as HP’s CFO and as a member of the company’s Executive Council since January 2007.
On the call, Lesjak, who has chosen to not be in the running for the permanent CEO job, said that she “has never been more confident in the company’s future.”
In a move to allay Wall Street concerns - Hurd was responsible for giving HP financial discipline and multiple solid quarters of performance - the company preannounced strong third quarter earnings.
The company projected earnings of 75 cents a share on revenue of $30.7 billion, up 11 percent from a year ago. Non-GAAP earnings will be $1.08 a share. Earnings were hit by a 2 cents a share charge to settle a lawsuit with the Department of Justice. Wall Street was expecting earnings of $1.06 a share on revenue of $30 billion.
For the fourth quarter, HP also raised its outlook. HP sees revenue of $32.5 billion to $32.7 billion. Earnings will be $1.03 a share to $1.05 a share. Non-GAAP revenue will be $1.25 a share to $1.27 a share.
And for the year, HP sees revenue of $125.3 billion to $125.5 billion with earnings of $3.62 to $3.64 a share. Non-GAAP earnings will be $4.49 a share to $4.51 a share. Those targets top Wall Street expectations.
The message from HP is that the company is firing on cylinders. However, Wall Street looks ahead and Hurd’s abrupt resignation is jarring. The next CEO walks into a good situation, but will have big shoes to fill.
Asked why the company chose to raise the financial outlook for the company while also announcing the resignation of the CEO, Lesjak replied that it was important to note that the Hurd’s resignation and the investigation into his actions have “nothing to do with the operational performance of the company… That’s all about Mark’s behavior and judgment.”
