HP shares slide as powerhouse faces growth fears

SAN FRANCISCO (AP) -- Hewlett-Packard Co.'s new CEO Leo Apotheker delivered some disappointing news to Wall Street on Tuesday after his first full quarter with the technology company.
Revenue growth, a persistent worry for companies of HP's size, will be slower this year than many analysts had envisioned. It was an unusual letdown that raised questions about the momentum of the company's acquisition-fueled transformation into a computing clearinghouse.
Investors punished HP's stock, one of the the Dow Jones industrial average. The stock shed 12 percent in extended trading following the release of the fiscal first-quarter results.
Few companies are as good a proxy for the technology market as HP. It's the world's biggest technology company by revenue and is a player in many far-flung markets, from personal computers and smart phones and tablets to technical services and computer servers and data storage.
Yet the latest report appears to point more toward the danger of companies setting ambitious financial targets in a shaky economy than any broad weakness in technology spending that will spill over to other companies.
Another heavyweight, Cisco Systems Inc., has also stumbled, but its problem is mainly that it relies heavily on sales to cash-strapped government buyers. That's an area that HP is far less exposed to.
HP said after the market closed that its net income jumped 16 percent to $2.61 billion, or $1.17 per share, in the three months ended Jan. 31. A year ago, it earned $2.25 billion, or 93 cents per share.
HP said that excluding one-time items, it earned $1.36 per share in the latest quarter. That was ahead of the $1.29 per share that analysts polled by FactSet expected on that basis.
Revenue rose 4 percent to $32.30 billion, from $31.18 billion a year ago. But analysts expected more: $32.96 billion, according to FactSet.
HP appeared to attempt to quell concerns by raising its full-year profit forecast. It expects net income in a range of $5.20 to $5.28 per share, excluding items, which is in line with analysts' target for $5.23 per share on that basis.
But revenue prediction fell short. HP said it expects revenue of $130 billion to $131.5 billion in its current fiscal year, which ends in October. Analysts expected $132.91 billion.
The guidance raised concerns because HP has spent heavily in recent years on acquisitions that were expected to propel substantial growth in areas that rival IBM Corp. has found highly lucrative, especially selling technical services to corporations.
Those changes were set in motion by Apotheker's predecessor, Mark Hurd, who was forced out in August in a sexual harassment scandal that led to Apotheker's hiring and the replacement of a third of HP's board of directors.
The latest numbers show that HP is benefiting from the changes in its business model -- just not as much as some investors would like.
HP's keener courtship of corporations has helped the company grow in the face of anemic consumer demand.
Hurd was trying to make HP look more like IBM, which rescued itself from near collapse in the 1990s by focusing on outsourcing and other technology services that investors can count on being in strong demand in good times as well as bad because they can help save companies money.
Yet revenue in HP's services division fell 2 percent from the year-ago period. Weakness in short-term services contract signings drove the decline, Apotheker said.
It doesn't necessarily reflect an industry-wide problem. IBM's services revenue rose 2 percent in the latest quarter. IBM's services business is almost twice as big as HP's.
HP's personal computer division had a 1 percent decline in revenue. HP underestimated the extent of the weakness in the consumer PC market, Apotheker said. Consumers have scaled back their spending on PCs amid economic worries. They also now have more choices with the emergence of tablet computers.
HP's experience doesn't track exactly with the overall PC market, which remains hobbled by the Great Recession but has continued to grow, albeit slowly.
Shares in HP, which is based in Palo Alto, tumbled $5.83 to $42.40 in after-hours trading. They had closed the regular session down 44 cents, or 1 percent, at $48.23.

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Lara Logan: Was She Actually Raped? It Makes a Difference.

Was Lara Logan raped by the insane mob in Cairo last Friday? Most media are shirking their jobs by a careful tiptoe around that key question. Ask women (or men), and they'll tell you that actual rape is worse than a mauling, even if the beating includes vicious groping. Exactly how much of a sexual assault was it? That matters. If it was actual rape, then the outrage needs to be ratcheted up. Among those not afraid of addressing the question is the New York Post, whose Clemente Lisi reports today:

The separation and assault lasted for roughly 20 to 30 minutes, said a person familiar with the matter, who added that it was "not a rape."

Was it or not? If it was, that would take this horrific act way beyond the pale. Despite what CBS and her family and the pusillanimous media say, the need to know trumps privacy.

Judging by the plucky and blunt Logan's frank talk on Jon Stewart's Daily Show and other venues, she will eventually tell us the details.
And it wouldn't be to satisfy some twisted prurience. It would be because she's blunt and a real reporter unafraid to deliver unpleasant truths. Here she is on Stewart in 2008:

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Hosni Mubarak Reportedly in Coma; Maybe in Germany

According to unconfirmed reports, including from the Egyptian daily Al-Masry Al-Youm, ousted Egyptian President Hosni Mubarak, who resigned last week after almost three weeks of violent protests in his country, is in a coma. Other (pro-government) sources say that the 82-year-old former president is in a "severe psychological condition" but not in a coma, while yet another report places him "on death's door in a hospital in Baden, Germany.

The Obama administration and Egypt's prime minister believe Mubarak is in Sharm el-Sheikh, Egypt, where he has a private residence.

There are also reports that Mubarak fainted twice during his final speech on Thursday night, possibly precipitating the coma? At any rate, wow. Bad month.

Mubarak Mystery: In Egypt, In Germany, In Coma? [CBS]

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How Hosni Mubarak Got So Rich

The mounting pressure from 18 days of historic protests finally drove Egyptian President Hosni Mubarak from office, after three decades as his nation's iron-fisted ruler. But over that time, Mubarak amassed a fortune that should finance a pretty comfortable retirement. The British Guardian newspaper cites Middle Eastern sources placing the wealth of Mubarak and his family at somewhere between $40 billion and $70 billion. That's a pretty good pension for government work. The world's richest man--Mexican business magnate Carlos Slim--is worth about $54 billion, by comparison. Bill Gates is close behind, with a net worth of about $53 billion.
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Mubarak, of course, was a military man, not a businessman. But running a country with a suspended constitution for 30 years generates certain perks, and Mubarak was in a position to take a slice of virtually every significant business deal in the country, from development projects throughout the Nile basin to transit projects on the Suez Canal, which is a conduit for about 4 percent of the world's oil shipments. "There was no accountability, no need for transparency," says Prof. Amaney Jamal of Princeton University. "He was able to reach into the economic sphere and benefit from monopolies, bribery fees, red-tape fees, and nepotism. It was guaranteed profit."

Had the typical Egyptian enjoyed a morsel of that, Mubarak might still be in power. But Egypt, despite a cadre of well-educated young people, has struggled as an economic backwater. The nation's GDP per capita is just $6,200, according to the CIA--one-seventh what it is in the United States. That output ranks 136th in the world, even though Egypt ranks 16th in population. Mubarak had been working on a set of economic reforms, but they stalled during the global recession. The chronic lack of jobs and upward mobility was perhaps the biggest factor driving millions of enraged Egyptian youths into the streets, demanding change.

[See 5 reasons to stop fearing China.]

Estimates of Mubarak's wealth will probably be hard to verify, if not impossible (one reason dictators tend not to make it onto Forbes's annual list). His money is certainly not sitting in an Egyptian vault, waiting to be counted. And his delayed exit may have allowed Mubarak time to move money around and hide significant parts of his fortune. The Swiss government has said it is temporarily freezing any assets in Swiss banks that could be linked to Mubarak, an uncharacteristically aggressive move for the secretive banking nation. But that doesn't mean the money will ever be returned to the Egyptian people, and it may even find its way to Mubarak eventually. Other Mubarak funds are reportedly sitting in British banks, and Mubarak was no doubt wily enough to squire away some cash in unlikely places. Plus, an eventual exile deal could allow Mubarak to retain some of his wealth, no questions asked, as long as he and his family leave Egypt and make no further bids for power.

Epic skimming is a common privilege of Middle Eastern despots, and Mubarak and his two sons, Gamal and Alaa, were a bit less conspicuous than some of the Saudi princes and other Middle Eastern royals seen partying from time to time on the French Riviera or other hotspots. The family does reportedly own posh estates in London, New York, and Beverly Hills, plus a number of properties around the Egyptian resort town of Sharm El Sheikh, where Mubarak reportedly went after resigning the presidency.

Mubarak also spread the wealth far and wide in Egyptian power circles--another Middle Eastern tradition--one reason he incurred the kind of loyalty that allowed him to rule for a remarkable three decades. Top Army officials were almost certainly on his payroll, which might help explain why the Army eased him out in the end--allowing a kind of in-country exile--instead of hounding him out of Egypt or imprisoning him once it was clear the tide had turned against him for good.

[See how government spending skyrocketed.]

That money trail, in fact, will help determine whether Egypt becomes a more prosperous, democratic country, or continues to muddle along as an economic basket case. Even though he's out of power, Mubarak may still be able to influence the Army officials running the country, through the financial connections that made them all wealthy. And if not Mubarak, the next leader may be poised to start lining his pockets the same way Mubarak did. For Egypt to have a more effective, transparent economy, all of that will have to be cleaned up. There are probably a lot of people in Cairo who have been checking their bank balances lately.

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Barack Obama Biography

President of the United States. Born Barack Hussein Obama on August 4, 1961, in Honolulu, Hawaii. Obama's mother, Ann Dunham, grew up in Wichita, Kansas, where her father worked on oil rigs during the Depression. After the Japanese attack on Pearl Harbor, Dunham's father, Stanley, enlisted in the service and marched across Europe in Patton's army. Dunham's mother, Madelyn, went to work on a bomber assembly line. After the war, the couple studied on the G.I. Bill, bought a house through the Federal Housing Program and, after several moves, landed in Hawaii.
Obama's father, Barack Obama, Sr., was born of Luo ethnicity in Nyanza Province, Kenya. The elder Obama grew up herding goats in Africa, eventually earning a scholarship that allowed him to leave Kenya and pursue his dreams of college in Hawaii. While studying at the University of Hawaii in Manoa, Obama, Sr. met fellow student, Ann Dunham. They married on February 2, 1961. Barack was born six months later.
Obama's parents separated when he was two years old, later divorcing. Obama, Sr. went on to Harvard to pursue Ph.D. studies, and then returned to Kenya in 1965. In 1966, Dunham married Lolo Soetoro, another East–West Center student from Indonesia. A year later, the family moved to Jakarta, Indonesia, where Obama's half-sister Maya Soetoro Ng was born. Several incidents in Indonesia left Dunham afraid for her son's safety and education so, at the age of 10, Barack was sent back to Hawaii to live with his maternal grandparents. His mother and sister later joined them.
While living with his grandparents, Obama enrolled in the esteemed Punahou Academy, excelling in basketball and graduating with academic honors in 1979. As one of only three black students at the school, Obama became conscious of racism and what it meant to be African-American. He later described how he struggled to reconcile social perceptions of his multiracial heritage with his own sense of self. "I began to notice there was nobody like me in the Sears, Roebuck Christmas catalog...and that Santa was a white man," he said. "I went to the bathroom and stood in front of the mirror with all my senses and limbs seemingly intact, looking the way I had always looked, and wondered if something was wrong with me."
Obama also struggled with the absence of his father, who he saw only once more after his parents divorced, in a brief 1971 visit. "[My father] had left paradise, and nothing that my mother or grandparents told me could obviate that single, unassailable fact," he later reflected. "They couldn't describe what it might have been like had he stayed." Obama, Sr. eventually lost his legs in an automobile accident, also losing his job as a result. In 1982, he died in yet another car accident while traveling in Nairobi. Obama, Jr. was 22 years old when he received the news of his father's passing. "At the time of his death, my father remained a myth to me," Obama said, "both more and less than a man."

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