8-21-13 4:36 PM EDT | Email Article

By Dan Gallagher and Benjamin Pimentel, MarketWatch


SAN FRANCISCO (MarketWatch) -- Hewlett-Packard Co. reported a drop in quarterly sales and earnings on the low side of Wall Street estimates, as revenue for its computer, printing, enterprise and financial services arms fell.


The company also announced the surprise shift of two high-ranking executives. Dave Donatelli, who's been running the bulk of H-P's enterprise business for the last four years, has been reassigned to work on early-stage technology within the company, while chief marketing officer Marty Homlish was also shifted to another role.


The changes were reported earlier in the day by the AllThingsD technology blog.


H-P (HPQ) shares were down nearly 2.5% in after-hours trading following the results. The stock has surged more than 75% since the first of the year.


For the quarter ended July 31, H-P reported fiscal third quarter net income of $1.4 billion, or 71 cents per share, compared to a net loss of $8.9 billion, or $4.49 per share, for the same period last year. Adjusted earnings came in at 86 cents per share.


Revenue fell 8% to $27.2 billion.


Analysts were expecting adjusted earnings of 87 cents per share on revenue of $27.3 billion, according to FactSet.


For the fiscal year ending in October, H-P said it expects adjusted earnings to come in the range of $3.53-$3.57 per share. Analysts had been expecting adjusted earnings of $3.56 per share for the period.


The shift of Donatelli and Homlish came as a surprise. Donatelli has been with the company since 2009, having previously served in an executive stint at data storage firm EMC (EMC) . At H-P, he's been in charge of the business unit that sells servers, storage and networking gear. That was organized into the company's Enterprise Group last year, giving him the role as executive vice president and general manager of the business.


Donatelli was also a rumored candidate for the CEO job at H-P before the company named Whitman to the top postion in 2011.


H-P has named current chief operating officer Bill Veghte to the enterprise role. He has previously run the company's software business. H-P said there are no "immediate plans" to name a new COO.


Homlish joined H-P under the previous, controversial administration of CEO Leo Apotheker. The two had worked together at German software giant SAP. He will now be H-P's chief "customer experience officer," while the marketing role will be run by communications chief Henry Gomez.

-Dan Gallagher; 415-439-6400; AskNewswires@dowjones.com


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08-21-13 1636ET

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