Whitman lowers HP expectations

HP CEO Meg Whitman lowered expectations for her company as she delivered news about HP's performance and future, following that company's earnings release.

SAN FRANCISCO, CA (Catholic Online) - Meg Whitman said in an interview, "this company has been through a lot." She is right.

Over the past 16 months, HP has gone from being the world's largest tech company by revenue, to being nearly overrun by Apple. The ouster of two CEOs and major shifts in strategy have hurt the company along with changes in the economy.

Whitman said that HP would work over the coming year to rebuild itself.

In mid-September, Leo Apotheker was replaced as CEO after less than a year at the helm. The company stock took a fall after the $11.7 billion acquisition of the British software firm Autonomy.
He also announced that HP would stop manufacturing personal computers and would move to higher margin activities such as providing services to other firms. These decisions were ultimately rejected by shareholders and Apotheker was replaced with Whitman.

Following the earnings report, Whitman made clear she did not expect swift financial growth for HP. While this disappointed many investors, others regarded it as a very wise move. A.M. Sacconaghi, an analyst with Sanford Bernstein said, "HP did the right thing by lowering the bar and lowering expectations. If anything, it was a little too forceful. They were calling for earnings to go down 15 percent, year on year."

Other analysts say that by lowering expectations, Whitman is positioning herself to exceed them next year.

Whitman explained that she felt the company was strong and referred to innovations such as low power servers that use the same type of chips found in mobile phones, and software that will allow HP to analyze very large sets of data for pattern recognition, analysis and prediction, would have a strong impact on HP over the long-term. However, she asserted that expectations should remain low for at least the next year.

Whitman said, "I feel quite good about the portfolio of assets. We can do more."

If anything, Whitman is doing a good job signaling to investors that HP now has a long-range strategic plan to return itself to the top of the market. What remains to be seen, is if investors have the kind of patience that she is calling for.

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