Hewlett-Packard Co., the No. 1 personal computer maker, announced that it went through another quarter of a decrease in demand for personal computers and services aimed at businesses. The company noted an $8.9 billion quarterly loss as personal computer sales dropped again and it recorded a huge write-down linked to its $13.9 billion purchase of Electronic Data Systems Corp. Meg Whitman, Chief Executive Officer at Hewlett-Packard Co., faces the turnaround challenge.
Hewlett-Packard financial results
According to estimates, Hewlett-Packard profit excluding some cost will be $4.05 to $4.07 a share in the fiscal year that ends in October. Former company’s forecast, which was issued in May, estimated Hewlett-Packard profit to be $4.05 to $4.10 a share. Moreover current figures are below analyst’s estimates of average of $4.08 per share. Data shows, however, that company is in troubles. Hewlett-Packard shares dropped 5.2 percent to $18.20 in late trading. In addition, the stock had already gone down 25 percent this year.
Therefore company decided to reduce its full-year earnings outlook, as it was stated above. The decision of reducing the forecast on Hewlett-Packard profit was driven by decrease in demand for personal computers as well as the sluggish economy in Europe and a slow growth in China.
The expected Hewlett-Packard profit, which is said to be below former estimates, has suffered from losing “share in all key enterprise segments”, according to Abhey Lamba, an analyst at Mizuho Securities USA Inc. in New York.
However Meg Whitman, CEO at Hewlett-Packard Co., admitted that the company had been hit by the decrease in demand for personal computers; she added that the company would turnaround eventually.
Hewlett Packard, which employs over 300,000 people, is currently undergoing a restructuring aimed at focusing on enterprise services. The scheme plans to downsize the workforce by 8 percent. It is said that by the end of this fiscal year the company will have reduced its staff. According to Cathie Lesjak, Chief Financial Officer at Hewlett Packard, 11.500 workers will have lost their jobs by the end of fiscal 2012.
Whitman to turnaround Hewlett-Packard
Hewlett Packard suffered under the rules of former Chief Executive Leo Apotheker's. However the current CEO Meg Whitman has urged investor to once again trust the company and be patient as she tries to increase the company’s revenue and cut costs.
Meg Whitman, who took the CEO position in September, is currently struggling to transform Hewlett-Packard. Given that the company’s dominance in personal computers and printers matters less, the Meg Whitman’s plans are very ambitious and hard to achieve. However she acknowledged the fact that it might take years to create a growth of the company amid long-term drop.
Hewlett Packard plans to launch a tablet computer running Microsoft Windows 8 software to help revitalize the personal computer division. However the device will be targeting mainly businesses rather than individual consumers. But this is not the end of company’s plans regarding computer devices. Hewlett Packard puts lots of hopes in new lightweight, touch-screen-enabled laptops, which are called ultrabooks. A few of ultrabooks have been on the market since a couple of months; however the company plans a big push of them by the end of the year.
Meg Whitman sees the bright future ahead of Hewlett Packard, she said: “We’ve accomplished a number of things. The drama is way down. The leaks are down. We meant what we said and we said what we meant.”