Hewlett-Packard Co. issued a forecast for fiscal fourth-quarter profit that missed some analysts’ estimates, and Chief Executive Officer Meg Whitman rescinded a projection for growth in fiscal 2014 as ebbing demand for personal computers and lower business spending hamper her turnaround efforts.

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 and shifts to mobile technologies that have sapped its 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.

In Retreat

In a conference call with analysts, CEO Whitman cited a “weak enterprise spending environment,” with sales challenged in Europe and China. Pointing to difficulties in Hewlett-Packard’s enterprise and PC businesses, she said she now projects “that total company year-over-year revenue growth in fiscal 2014 is unlikely.” Whitman had previously said she expects sales growth in the next fiscal year, which begins in November.

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 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.

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.

Under Whitman’s executive changes today, Donatelli and Homlish are being given new roles. Donatelli will focus on identifying early-stage technologies, the company said in a statement, while Homlish will take on a new position as chief customer experience officer.

In a statement, Whitman said she was making the new appointments as the “industry is undergoing profound change and you need to rapidly respond with fresh ideas and bold execution.”

Tense Times

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.

Today’s management changes come as sales and profit in Hewlett-Packard’s enterprise computing group are sliding. Revenue declined 9.4 percent to $6.79 billion, and earnings before taxes dropped 20 percent to $1.03 billion. Sales in the group that includes PCs fell 11 percent to $7.7 billion.

Veghte is also responsible for Hewlett-Packard’s cloud-computing services, an area where it’s struggled to gain market share, said Bill Kreher, an analyst at Edward Jones & Co., who has a sell rating on the shares.

Missing Out

Hewlett-Packard is missing out on three of the biggest trends in technology: The rise of smartphones and tablets, businesses’ move to online computing services from on-site hardware and software, and the replacement of its stock-in-trade photo printing with Web services from Facebook Inc. (FB), Google Inc. and others, Kreher said.

“If HP could just convince the Street that they’re going to participate in any one of these trends, it would lead to a resurgence in revenue and profit growth,” said Kreher.

At the same time, 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.

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.

Industry Landscape

Hewlett-Packard, the No. 2 PC maker after Lenovo, has added tablets running Windows and Google Inc. (GOOG)’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.

(Source: Bloomberg)