June 2 (Bloomberg) -- Hewlett-Packard Co. Chief Executive Officer Leo Apotheker said the computer maker plans to buy back $3 billion of its stock this quarter, part of an effort to boost returns for shareholders amid a flagging share price.
Apotheker, speaking at an investment conference in New York today, also said he hopes the company’s board will approve an increase in Hewlett-Packard’s dividend each year. On March 14, the Palo Alto, California-based company raised its quarterly dividend by 50 percent to 12 cents a share.
“The stock is ridiculously cheap,” Apotheker said.
Hewlett-Packard, the world’s largest computer maker, is seeking ways to provide value to shareholders in addition to increasing profit, Apotheker said at the conference, which was hosted by Sanford C. Bernstein & Co. Stock repurchases cut the number of shares outstanding and reduce dilution of earnings per share.
The shares have tumbled 21 percent since Aug. 6, when former CEO Mark Hurd resigned. Hewlett-Packard fell 21 cents to $36.43 at 4 p.m. today in New York Stock Exchange trading.
On Aug. 30, Hewlett-Packard authorized $10 billion in share repurchases.
The company cut its annual sales forecast by $1 billion on May 17, after personal computer sales fell and revenue growth from technology services failed to accelerate.
Hewlett-Packard’s services business will have “visible changes” in the next four to six quarters, Apotheker said at the conference. During the company’s second-quarter earnings report, Apotheker said he is looking for a new executive to lead the services business, and is orienting the unit to win more contracts among companies taking advantage of so-called cloud computing.
The company is also hoping to “capitalize” on Microsoft Corp.’s new version of its Windows operating system, called Windows 8, running on chip technology from ARM Holdings Plc, he said.
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