New HP CEO Leo Apotheker inherits company on strong financial footing

Former SAP chief executive also joins board of directors; Ray Lane named board chair

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When former SAP chief executive Leo Apotheker starts his new job as CEO of Hewlett-Packard on Nov. 1, he'll be taking over a company currently on solid financial footing, despite a recent history of turbulence in the corner office.

The German-born Apotheker, 57, was named chief executive of HP on Thursday, nearly two months after the abrupt resignation of chief executive Mark Hurd over allegations of sexual harassment and expense-account irregularities. Apotheker also will serve on HP's board of directors, where he will be joined by former Oracle president Ray Lane, who was appointed as the non-executive chairman of the board.

Apotheker served as SAP AG's top executive from April 2008 to February 2010. After SAP decided not to extend his contract as an executive board member, Apotheker resigned as CEO and retired from the company.

His background as an enterprise software veteran is a good match for HP's current needs as the company attempts to further penetrate the corporate IT market.

HP earlier this week forecast optimistic numbers for fiscal 2011, telling analysts it expects revenue of $131.5 billion to $133.5 billion, with GAAP earnings of $4.35 to $4.45 per share and non-GAAP earnings of $5.05 to $5.15 per share. Analysts have been forecasting GAAP earnings of $4.99 per share on revenue of $131.42 billion for FY 2011.

HP's current fiscal year ends Oct. 31. The company has forecast revenue of $125.3 billion to $125.5 billion and GAAP net income of $3.62 to $3.64 per share.

HP (NASDAQ: HPQ) shares closed in regular trading Thursday down 42 cents, or 1.1 percent to 42.07. It'll be interesting to see how the stock moves after hours.

Apotheker's hiring ends weeks of speculation over who would replace Hurd, who was credited with turning around HP's fortunes following the departure of controversial former CEO Carly Fiorina, who is running as the Republican nominee in California for the U.S. Senate seat held by Democrat Barbara Boxer.

Hurd presided over extensive layoffs at HP while streamlining business units and improving financial performance. After his resignation from HP, he was hired by Oracle CEO Larry Ellison to be co-president of that company.

IDG News Service reports that Apotheker's appointment was a surprise to industry observers, who had heard HP was looking at promoting a chief executive from within. Two names that had come up were Ann Livermore, head of the company's enterprise business, and PC division leader Todd Bradley.

Interesting fact about Apotheker (via Wikipedia): He was the first Jewish executive whose parents escaped the Holocaust to run a large German company.

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