HP forecasts a solid 2011

SAN FRANCISCO, USA: Hewlett-Packard Co, reassuring investors worried about growth after the surprise departure of ex-CEO Mark Hurd, forecast 2011 results that surpassed Wall Street expectations and propped up its shares.

The world's largest tech company underscored its potential in still-evolving markets for mobile devices such as tablets, storage and networking. But competition in those areas is fierce and getting fiercer.

HP forecast 12 to 14 percent growth in non-GAAP earnings in fiscal 2011 and revenue growth of 5 to 7 percent, helping its shares gain more than 1 percent in after-hours trade.

But the company has not announced who will take the helm, despite hopes among some investors it would do so at its annual analyst meeting on Tuesday.

Following Hurd's controversial ouster, shareholders have grumbled about HP's spending on acquisitions, and worried about newly aggressive rivals such as International Business Machines Corp to Oracle Corp.

Investors got a fresh look at several executives said to be competing for the top job, including PC group head Todd Bradley and enterprise division chief Ann Livermore.

Interim CEO Cathie Lesjak emphasized what she called HP's "extraordinary opportunity" to grow, noting its global reach and an addressable market she pegged at $1.6 trillion in 2013.

Lesjak also defended the company's innovation strategy. IBM CEO Sam Palmisano this month blasted HP for having focused too much on shaving costs and not spending enough on research and development to drive growth.

"Innovation has, is, and will continue to be the core of Hewlett-Packard," Lesjak told analysts, noting that the company will increase R&D spending faster than revenue next fiscal year.

Take me to your leader

For fiscal 2011, HP forecast a rise in earnings, excluding items, to $5.05 to $5.15 a share on revenue of $131.5 billion to $133.5 billion. Wall Street is targeting earnings of $4.99 a share on revenue of $131.4 billion, according to Thomson Reuters.

HP also forecast an operating margin of 11.6 to 11.8 percent for fiscal 2011, as the company aims to maintain profitability improvements that began in earnest under Hurd.

For fiscal 2011, HP expects 6 to 8 percent growth in its PC business, 2 to 4 percent growth in services, 3 to 4 percent growth in its printing group, and 7 to 9 percent growth in its storage, servers and networking segment.

HP, which rakes in about as much revenue annually as Microsoft Corp (MSFT.O) and Apple Inc combined, is on the prowl for a new chief, and is reportedly searching among its own ranks