HP expects the 3Com deal to slightly hurt adjusted earnings in fiscal 2010. The company said the deal values 3Com at $7.90 a share, a 53% premium to Wednesday's closing price of $5.18.
The deal is expected to close in the first half of 2010, but it has already been approved by the boards of both companies. At the same time, HP issued preliminary fiscal Q4 results, it said, to aid in communications with investors over the 3Com acquisition.
HP expects to report earnings of 99 cents a share, compared with 84 cents a year earlier. Earnings are expected to rise to $1.14 a share from $1.03 (excluding restructuring and acquisition-related charges).
The earnings number would be above the projections HP gave in August. At that time, the company projected per-share earnings, excluding charges, of $1.12, which was still above analysts' estimates.
Additionally, HP announced an outlook for fiscal Q1. Per-share earnings should be in the range of $1.03 to $1.05 on revenue of $29.6 billion to $29.9 billion. Analysts polled by Thomson Reuters expected $1.03 and $29.24 billion, respectively.
In a press release, Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP, in a statement:
"By acquiring 3Com, we are accelerating the execution of our converged Infrastructure strategy and bringing disruptive change to the networking industry. By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry. By combining HP ProCurve offerings with 3Com's extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center."
Posted November 11th, 2009 by Michael Santo
