Hewlett-Packard’s record loss shows challenge facing CEO Whitman

Hewlett-Packard Co. posted a record quarterly loss and reported slumping sales for personal computers and services aimed at businesses, underscoring the turnaround challenge facing Chief Executive Officer Meg Whitman.

The fiscal third-quarter loss of $8.86 billion includes a writedown for the enterprise-services unit and reflects a 10 percent decline in PC revenue. The company pared the high end of its full-year forecast for profit excluding some items to $4.07 a share, from $4.10, missing the average $4.08 analyst estimate compiled by Bloomberg.

Almost a year into her tenure at the helm of the largest personal computer maker, Whitman is boosting investment in research and development and revamping the PC, printer and enterprise-services units. Hewlett-Packard, which will discuss its 2013 outlook at an analyst meeting in October, is under pressure from rivals such as Apple Inc. in computing devices and International Business Machines Corp. among corporate clients.

“HP seems to have lost share in all of the key enterprise segments,” Abhey Lamba, an analyst at Mizuho Securities USA Inc. in New York, wrote in a research note after the results.

Hewlett-Packard fell 7.4 percent to $17.78 at 9:36 a.m. in New York, the biggest decline in a year. The stock had dropped 25 percent this year through yesterday.

The PC market remains weak, and the company is in the “early stages of a turnaround,” Whitman said yesterday on a conference call with analysts.

Windows 8

To help revive the PC division, Hewlett-Packard plans to release a tablet computer running Microsoft Corp.’s Windows 8 software later this year. The device will be aimed mainly at businesses rather than consumers, Whitman said in an interview. The company decided to design a tablet that’s “desirable” to workers while including security and durability features, rather than trying to take on Apple’s iPad directly, she said.

“Make no mistake about it, the consumer tablet market today is an Apple market,” Whitman said. “Our decision was not to just go straight at Apple with a me-too product.”

The company wants to ship the tablet this year, after the October introduction of Windows 8, though it may land on store shelves until next year, Whitman said.

Sales in Hewlett-Packard’s PC division declined 10 percent to $8.62 billion, Palo Alto, California-based Hewlett-Packard said yesterday in a statement. That added to evidence of a slump that showed up in results this week from Dell Inc., which forecast third-quarter sales that missed estimates and cut its full-year profit outlook.

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