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HP CEO Quits, Citing Family Health Issue HP Names Lores as Its New CEO -- WSJ

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08/23/2019 | 02:47am EDT

Imaging chief Lores to succeed Weisler, as shares of PC maker fall 6.4% after hours

By Patrick Thomas 

HP Inc. Chief Executive Dion Weisler is stepping down as the leader of one of the world's largest PC makers later this year for family health reasons.

Mr. Weisler, who took over as HP's CEO in 2015, will be succeeded by Enrique Lores, the head of the company's imaging, printing and solutions business, HP said on Thursday. Mr. Lores, a Spaniard who joined the company as an intern 30 years ago, will assume the top job on Nov. 1 and work with Mr. Weisler through January 2020 to aid the transition, the company said.

"We need to continue to expand into some of our growth opportunities," Mr. Lores told analysts on an earnings conference call. The incoming CEO said HP would work on reducing its cost structure and simplifying its operations. He promised more details would come at an investor meeting in October.

Shares of HP fell more than 6% after hours.

Mr. Weisler has led HP, which sells computers and printers, since Hewlett-Packard Co. in 2015 split the company that Bill Hewlett and Dave Packard started in their Palo Alto, Calif., garage in 1939. The other business, Hewlett Packard Enterprise Co., focuses on selling computer servers, data-storage gear and other services for corporate-technology departments. Mr. Weisler said he would eventually leave Silicon Valley to be with his family in Australia.

When HP split, Mr. Weisler took over what was seen as a legacy business lacking the growth potential of the Enterprise arm, which was catering to the booming corporate-technology-services sector. Despite a decline in industrywide PC sales since 2015, HP has grown its market share, even as its total shipments also declined, according to Gartner Inc.

In its latest quarter, HP reported flat revenue after selling more desktop computers, but gains were offset by weaker performance in its printing business. HP was the world's No. 2 personal-computer maker by shipments in the second quarter, according to Gartner.

Revenue from HP's personal-systems unit, which includes its PC business and sales of tablets, systems for retailers and other devices, rose 3% in its fiscal third quarter.

"During the last quarter we have seen an economic slowdown, and this is also having an impact, especially in the consumer side," Mr. Lores said, echoing comments from other tech suppliers that have warned about market challenges.

Sales of printers, printing supplies and related items dropped 5%. HP's printing business has been a focus for investors. It offers larger profit margins than those from HP's other business segments, but has struggled recently. Mr. Weisler attributed the quarter's slump to macroeconomic uncertainty and lower sales in its Europe, Middle East and Africa region. The printer market is expected to remain soft, Mr. Weisler said. HP has been trying to boost its printing-services business, which Mr. Lores called critical.

Overall, HP reported sales of $14.60 billion, compared with $14.59 billion a year earlier. Analysts surveyed by FactSet had expected $14.62 billion of revenue in the quarter.For the quarter ended July 31, HP's profit rose 34% to $1.18 billion, or 78 cents a share. Analysts surveyed by FactSet were expecting earnings of 53 cents a share.

The company raised its fiscal-year adjusted earnings outlook to between $2.18 and $2.22 a share, compared with an earlier forecast of $2.14 to $2.21. For the current quarter, HP said it expects adjusted earnings between 55 and 59 cents a share.

Excluding acquisition and restructuring charges and after other adjustments, HP reported a profit of 58 cents a share, above the 55 cents a share analysts were expecting on an adjusted basis.

Per-share earnings are also expected to rise in fiscal 2020, Mr. Weisler said.

Write to Patrick Thomas at Patrick.Thomas@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
GARTNER INC 2.50% 143.64 Delayed Quote.12.36%
HEWLETT PACKARD ENTERPRISE -2.83% 14.43 Delayed Quote.9.24%
HP INC -1.49% 18.47 Delayed Quote.-9.73%
JOHNSON MATTHEY PLC -1.90% 3100 Delayed Quote.10.75%
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