October 3, 2012 (Bloomberg) – HP CEO Meg Whitman forecast fiscal 2013 profit that missed estimates and said a turnaround at the struggling computer maker won’t happen any time soon, sending shares to a more than nine-year low.

“The recent financial performance of HP has not been good,” Whitman said at a meeting with financial analysts Wednesday morning. “The single biggest challenge facing Hewlett-Packard has been the multiple changes in CEOs,” she said. “It’s going to take longer to right this ship than any of us would like.”

Whitman, the sixth CEO since 2005, including interims, is seeking to revive sales growth at the world’s largest PC maker by targeting businesses with new tablets, software and hardware for data centers. The PC market will expand less than 1 percent this year – the worst performance since it shrank in 2001 – according to IDC, complicating Whitman’s turnaround effort.

“I don’t think anyone expected them to have such a dire outlook,” said Amit Daryanani, an analyst at RBC Capital Markets. “They are alluding towards a more challenging fiscal 2013 versus fiscal 2012,” while most investors had anticipated that profit would stabilize or be flat.

HP fell 8.5 percent to $15.67 at 12:26 p.m. in New York, and earlier touched $15.62 for the lowest intraday price since April 2003. Through yesterday, the stock had lost 25 percent since Whitman was named CEO on Sept. 22, 2011. Earnings excluding some items for the 2013 fiscal year, which begins next month, will be $3.40 to $3.60 a share, the Palo Alto, California-based company said today. Analysts on average had estimated profit of $4.16 a share, according to data compiled by Bloomberg.

Next year will be a “fix and rebuild year,” Whitman said. “Innovation is actually alive and well at HP. We need to work a lot harder to get those ideas productized and commercialized and into the market much faster.”

The push to boost sales to corporate customers comes as China’s Lenovo Group Ltd. is poised to supplant Hewlett-Packard as the top PC supplier. Its share of PCs dropped to 14.9 percent in the second quarter, while Lenovo’s increased to 14.7 percent, according to Gartner Inc.

Whitman has been spending more on research and development and directing funds toward areas of the computing market where she says Hewlett-Packard can gain an edge, including managing growing volumes of business data and helping companies transition to cloud-computing over the Internet.

In the enterprise computing market, Oracle Corp. is creating a cloud service that lets companies rent processing power, storage, database software and business applications from the company instead of buying them outright, a threat to Hewlett-Packard’s server and disk drive businesses.

Microsoft Corp., IBM and VMware are also vying to supply more of the platform software that can help companies switch to cloud computing.

HP is also developing data-center products such as a computer system that combines servers, storage and networking in the same chassis. The approach would borrow from HP’s Project Moonshot systems, which let customers cram thousands of computing cartridges into a machine to attack Web serving and data-analysis problems, people familiar with the matter have said.

In the tablet market dominated by Apple Inc.’s iPad, HP is seeking to appeal to corporate clients with an emphasis on security, durability and the ability to run business applications. HP plans to release a tablet running Microsoft’s Windows 8 software later this year.

Whitman has announced plans to cut 29,000 jobs by the end of fiscal 2014 to save as much as $3.5 billion a year. Many of the reductions are from the company’s underperforming enterprise services unit, which former CEO Mark Hurd added with the 2008 acquisition of Electronic Data Systems. In August, HP said it would write down the value of that business by $8 billion.

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