Hewlett-Packard (Nadsaq: HPQ) on Wednesday issued a forecast for fiscal fourth-quarter profit that missed some analysts’ estimates amid a historic slump in personal-computer sales that has hampered Chief Executive Officer Meg Whitman’s turnaround effort.

The second-biggest PC maker and largest printer supplier also unveiled a shake-up of its top ranks, naming Chief Operating Officer Bill Veghte as head of its enterprise business, replacing Dave Donatelli. Chief of Communications Henry Gomez was promoted to chief marketing officer, replacing Marty Homlish.

Earnings excluding some items will be 98 cents to $1.02 a share for the period which ends in October, the company said in a statement today. Analysts predicted $1.01 on average, according to data compiled by Bloomberg. For the 2013 fiscal year, earnings will be $3.53 to $3.57 a share, compared with the company’s previous forecast of $3.50 to $3.60. The stock fell in extended trading.

Hewlett-Packard, based in Palo Alto, California, is suffering from an extended decline in PC demand that’s sapping sales, even as it’s eliminating 29,000 jobs, delivering new products and paying down debt to improve its competitive position. A fifth consecutive quarter of declining global PC shipments crimped profit at the company, which hasn’t expanded quickly enough in new devices like smartphones and tablets that are eating into sales.

Marking Time


“I view this as a marking-time quarter in the process of them re-allocating their assets and shoring up the various divisions,” said Chris Bertelsen, chief investment officer at Global Financial Private Capital, in Sarasota, Florida, which bought Hewlett-Packard stock last year and pared its position this year after a run-up in price.

Shares fell as much as 6.4 percent to $23.75 in late trading after closing down 1.8 percent at $25.38 in New York. The stock has climbed 78 percent this year through yesterday compared with a 15 percent gain in the Standard & Poor’s 500 Index.

For the fiscal third quarter through July, sales fell 8 percent to $27.2 billion, compared with analysts’ average for $27.3 billion. Earnings excluding some items were 86 cents a share, compared with the average projection of 87 cents. Net income was $1.39 billion, compared with analysts’ $1.19 billion estimate.

Executive Shifts

Under Whitman’s executive changes today, Donatelli and Homlish are being given new roles. Donatelli is leaving his position after prolonged tensions with Whitman, said people with knowledge of the matter, who asked not to be identified because the information isn’t public.

In June, Whitman reorganized the PC and printer group, replacing longtime head Todd Bradley with one of his deputies, former Lenovo Group Ltd. executive Dion Weisler.

Whitman has also shaken up Hewlett-Packard’s board. The company added three directors in July, including former Microsoft Corp. software head Ray Ozzie, Jim Skinner, the former CEO of McDonald’s Corp. and current chairman of Walgreen Co., and Dob Bennett, the ex-CEO of Liberty Media Corp. The changes come after former chairman Ray Lane resigned his position in April, and Hewlett-Packard is searching for a new chairman.

PC shipments fell in the second quarter for a fifth straight period, sliding 10.9 percent, market researcher Gartner said in July. Consumers are increasingly opting for tablets instead of traditional desktops and notebooks, and businesses are holding onto old machines for longer.

Industry Slump

Dell Inc., the third-largest PC maker, is preparing to go private in a $24.9 billion leveraged buyout by CEO Michael Dell and his partner Silver Lake Management LLC. The deal would give the company the flexibility to invest in becoming more competitive in PCs, servers and other areas.

Hewlett-Packard, the No. 2 PC maker after Lenovo, has added tablets running Windows and Google Inc.’s Android operating system. It’s also delivering new printers, including the Officejet Pro X that delivers laser-printer speed and quality using cheaper liquid-ink technology.

In its enterprise-computing group, which includes servers, storage and networking equipment, the new Moonshot server and 3Par data-storage systems are improving Hewlett-Packard’s competitive position and boosting margins, Maynard Um, an analyst at Wells Fargo Securities, said in an Aug. 13 note to clients.

The company is facing competition in its data-center group from Cisco Systems Inc., EMC Corp., International Business Machines Corp. and Oracle Corp.

Hewlett-Packard plans to hold a meeting with financial analysts in San Jose, California, on Oct. 9, at which it’s expected issue guidance for next year, Abhey Lamba, an analyst at Mizuho Securities USA, said in an Aug. 14 research note.