HP’s 4Q to provide snapshot of new CEO’s progress

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SAN FRANCISCO (AP) ? Hewlett-Packard Co. CEO Meg Whitman will get a chance to persuade investors that she is well on her way to cleaning up the mess left behind by her predecessor when the world’s largest personal computer maker reports its fiscal first-quarter earnings.

WHAT TO WATCH FOR: The results, due out after the stock market closes Wednesday, will be as much of a rehabilitation update as a breakdown of HP’s financial performance for the November-through-January period.

Whitman, who had a successful stint as eBay Inc.’s CEO before failing in her 2010 bid to elected California’s governor, took over the HP’s top job five months ago after the company fired Leo Apotheker to end his 11-month reign. That means this report will cover HP’s first full quarter with Whitman at the helm.

Since her arrival, Whitman has spent much of her time trying to rebuild employee morale, regain customers’ confidence and repair the damage under Apotheker. Her biggest decision so far has been to hold on to the PC business that Apotheker announced he was considering discarding.

While most analysts think Whitman made the right call, the PC industry isn’t healthy right now. That’s largely because selling new computers is becoming increasingly difficult as more consumers embrace smartphones and computer tablets such as Apple Inc.’s iPad. Making the things even tougher, there was a shortage of hard disk drives ? a key PC component ? late last year after massive flooding closed factories in Thailand. A weakening economy in Europe and a strengthening dollar in the U.S. also undercut PC’s sales.

HP’s indecision on whether it wanted to keep making PCs didn’t help matters either. The uncertainty caused some companies and consumers who were still interested in buying PCs to choose products from vendors firmly committed to staying in the business.

A report by the research firm IDC already has chronicled HP’s PC struggles during the final three months of last year ? a span that included the holiday shopping season. IDC estimated HP shipped 15.1 million PCs worldwide during the October-December period, a 16 percent drop from the same time in 2010. During the same three-month stretch last, Apple sold 15.4 million iPads.

With the shift toward tablets accelerating, analysts participating in HP’s earnings conference call may press Whitman for details on how HP plans to adapt, especially the company has decided to give away its own mobile webOS software to open-source developers.

Microsoft Corp.’s upcoming release of Windows 8, an operating system designed for tablets as well as PCs, may hold one of the future keys for HP. But Windows 8 isn’t expected to hit the market until the later summer or early autumn.

HP has been trying to boost its revenue by selling more high-end computers, software and consulting services in recent years, but has had difficulty because of competition from IBM Corp. and Oracle Corp.

WHY IT MATTERS: Despites its troubles, HP remains one of the world’s best-known technology companies and a major employer with about 350,000 workers worldwide. It is also one of the 30 companies in the Dow Jones industrial average. The company’s stock has been a drag on the Dow since HP got rid of Mark Hurd as its CEO in an ethics scandal that erupted in August 2010. HP shares closed last week at $29.59, down 36 percent since Hurd’s departure. The Dow Jones average has gained 22 percent during that time.

WHAT’S EXPECTED: Excluding special charges and other items unrelated to its ongoing business, HP is expected to earn 87 cents per share on revenue of $30.7 billion, based on a survey of analysts by FactSet.

LAST YEAR’S QUARTER: HP earned $2.6 billion, or $1.17 per share, on revenue of $32.3 billion at the same time last year. Excluding certain items, HP earned $1.36 per share.