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HP writes off 2013 causing share price to tumble

Whitman forecasts a grim year ahead
Thu Oct 04 2012, 12:56
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FLOGGER OF EXPENSIVE PRINTER INK HP has said it doesn't expect a turnaround in its fortunes until 2014, effectively writing off 2013 and sending its share price into free fall.

HP CEO Meg Whitman told investors of the mess she is still unravelling from the short but highly damaging Leo Apotheker era. However as Whitman wrote off 2013 HP's stock price dove by almost 13 percent, wiping billions off the firm's market value and leaving its share price at a nine year low of $14.91.

Whitman's key phrase was "multi-year", saying the firm is in the midst of a "multi-year roadmap to turn the company around", telling investors not to expect any good news soon. HP also said it is carrying out a "multi-year restructuring" and repeated once again that Whitman has a "multi-year roadmap".

This certainly bodes well for HP's marketing department should it want to characterise the firm as a fast moving company that's able to quickly adapt with the times.

HP's top executives piled on the misery, with the firm forecasting an 11 to 13 percent decline in revenue for its enterprise services division, while its enterprise division that consists of servers and its printing group did not even provide revenue forecasts. The firm's only glimmer of hope came from its cloud operations, where it expects revenue from cloud services to increase and hit $8.4bn by 2015.

Whitman's decision to preannounce a poor 2013 should give her a little breathing room before the bean counters start to question her strategy for the firm. However, after a decade of consistent mismanagement, a multi-year plan might stretch into a decade long plan as the company struggles to compete with more nimble rivals. µ

 

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