Surprise! HP's Meg Whitman suggests the worst is behind for tech giant
Hopes were not high before Hewlett-Packard's annual meeting with securities analysts yesterday, but CEO Meg Whitman changed all that.
HP's Meg Whitman: Surprise
She sent shares rocketing higher by telling the analysts that her multiyear turnaround effort should cure the company's declining revenues in 2014. HP's shares were up about 8.6 percent at $22.53 at mid-afternoon.
Whitman took over HP two years ago. She has made big changes, replacing the heads of both of HP's major divisions and laying off thousands of workers. The aim: to keep profits rolling in despite the decline of HP's legacy strengths: personal computers and printers.
Revenues last year still dropped from $127 billion to $120 billion, but Whitman said, "While there is a lot more work to be done, we are making progress. This time last year, I was feeling HP was falling dangerously behind."
Whitman said the company should post consistent revenues in 2013 and 2014 and possibly start to see revenue growth in 2015. She does not plan any more layoffs.
"Fiscal 2014 will be a pivotal year," she said. "In fiscal 2015, you can still expect to see acceleration, and in fiscal 2016, an industry-leading company."
Whitman predicts that new sectors HP has entered -- such as networking, servers and software -- will make up for the losses in PC and printing sales.
"Over time these will become bigger revenue businesses and will overtake the declining businesses," she said.
PC industry analysts agree . Investors were impressed with Whitman's focus on growth instead of attempting to put out the fires in HP's traditional businesses.
"Most of the comments were about growth opportunities rather than fixing holes in the ship," analyst Patrick Moorhead told Reuters. "Investors like that."