Meg Whitman’s strategy for turning around Hewlett-Packard Co. failed to convince investors looking for speedier recovery and more sweeping change at a company struggling to compete in everything from personal computers to technology services. The shares dropped to a 9-year low.
Meeting with analysts a year after taking over, Chief Executive Officer Whitman outlined steps that include more focus on corporate customers, narrower product lines and multi- featured machines, such as printers that double as scanners and copiers. She also said the turnaround wouldn’t happen any time soon and projected 2013 profit that missed analysts’ estimates.
The full-day presentation from Whitman and her top lieutenants yesterday raised speculation that the plan may not revive a company that’s lost more than $90 billion in market value since the end of 2009. She blamed the computer maker’s challenges on management upheaval dating back to Carly Fiorina, underinvestment in new products and exposure to a PC business eroded by the shift to smartphones and tablets.
“They’re not the only company having a problem with the PC market, but when you have all these other problems and in the midst of that, the PC problem isn’t making your other problems look better,” said Ben Bajarin, an analyst at technology consulting firm Creative Strategies.
Hewlett-Packard dropped 3.6 percent to $14.37 at 9:34 a.m. in New York, for the lowest intraday price since March 2003. The stock closed at the lowest price since November 2002 yesterday.
The company’s outlook yesterday reinforced concern that the PC industry will continue to suffer from lackluster demand. Dell Inc. dropped 4.8 percent to $9.43, the lowest close since March 2009.
Earnings excluding some costs for the 2013 fiscal year, which begins next month, will be $3.40 to $3.60 a share, Palo Alto, California-based Hewlett-Packard said yesterday. Analysts on average had estimated profit of $4.16 a share, according to data compiled by Bloomberg.
“Whitman is right -- recent performance has not been good,” said Erik Gordon, a professor at the Ross School of Business at the University of Michigan. “Her plans haven’t convinced the market that future performance will be much better.”
Whitman, the sixth CEO since 2005, including interim chiefs, was joined by Chief Financial Officer Cathie Lesjak and executives responsible for each of the company’s major business units, including enterprise services, printing, hardware, software and cloud computing.