SPARE a thought today for the investor relations and communications professionals at technology giant Hewlett-Packard Co. (NYSE: HPQ).
They have probably had little sleep after rushing to prepare the company’s Q2 earnings materials two trading sessions earlier than planned after leaks of internal management memos to the media warning of tough business conditions.
The company’s stock fell 5% in after-hours trading Monday after Bloomberg reported details from a leaked May 4 memo by Chief Executive Officer Léo Apotheker to his top deputies saying the company is expecting “Q3 is going to be another tough quarter.”
Last week, two other memos from regional executives in the unit that sells PCs were leaked to the Wall Street Journal’s AllThingsDigital. HP’s stock declined modestly after they were published.
Rescheduled earnings release and conference call
After the Bloomberg story broke at 5:00 pm ET Monday, Palo Alto, California-based HP issued a news release and posted a notice on its official StockTwits corporate account saying it was rescheduling its earnings release to 4:30 am local time (7:30 am ET) and would hold its earnings call an hour later.
The announcement did not explain why the earning release was being brought forward. The original plan was to the release earnings tomorrow after the close of the regular session.
Analysts shrug off contents
Although HP’s stock price dropped on the news, analysts appeared to brush off the memos’ contents.
Brian Marshall with Gleacher & Co. told Reuters investors “already knew” about the tough conditions. “No one is looking for (stellar) revenue growth,” he said.
Meanwhile, Shaw Wu, an analyst with Sterne, Agee & Leach, told the Mercury News, which also obtained the memo: “It’s definitely cautionary. On the flip side, they are dealing with it.”
Leaks suggest dissension
Of course, the leaks themselves could shake investors’ confidence in the company since they suggest dissension in the ranks of management just seven months into the tenure of Apotheker, who was appointed after former CEO Mark Hurd was let go last August under a cloud of controversy.
Obviously someone is leaking internal documents to the media, causing disruption to the company and undermining the new CEO’s public statements about cost cutting being overdone and wanting to invest more in research and development.
Something tells me there are going to be many more sleepless nights ahead for the folks in HP’s IR and communications teams.