Hewlett Packard’s Profit Crashes 91%
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After a year of “drama”, new HP CEO Meg Whitman told investors to lower their expectations as the tech company reported a 91 percent fall in profits.
Just two months after taking over the helm of the ailing company, Whitman announced the grim fourth quarter fiscal results but insisted that the “company has been through a lot.”
In defence, Whitman said “what this company has been through would have felled lesser companies,” and rebuilding needs to be done for the world’s largest technology company by revenue.
After a year of “drama”, new HP CEO Meg Whitman told investors to lower their expectations as the tech company reported a 91 percent fall in profits.
Just two months after taking over the helm of the ailing company, Whitman announced the grim fourth quarter fiscal results but insisted that the “company has been through a lot.”
In defence, Whitman said “what this company has been through would have felled lesser companies,” and rebuilding needs to be done for the world’s largest technology company by revenue.
According to the New York Times, Whitman took over as the chief executive from Leo Apotheker, who “in less than a year roiled the company’s stock by acquiring the British software firm Autonomy for $11.7 billion, dropping its tablet computer business and publicly musing about whether H.P. might get out of the personal computer business.”
Related: New HP CEO to get $1 annual salary while ousted CEO walks away with $13 million
Whitman, who joined the Board last January, said the company would be focusing on the internal development of its business, which includes a range of personal computers, desktops, servers, printers, software and data management service.
Recovery, however, remains slow. Whitman warns that HP is looking at lower revenue and profits for 2012, cautioning that the problems cannot be solved overnight. At the same time, Whitman also assured investors of more reliability and less drama as the vulnerable tech giant seeks to get back on its feet.
[quote]I think 2012 for HP will be a rebuilding year. It’s a reset year, Whitman said in an interview.[/quote]HP will increase spending on research and development and augmenting its sales force, Whitman added, but it will avoid large acquisitions like the stunning $10 billion deal to buy a British software company, announced last August, that have strained HP’s balance sheet in recent months.
That approach, she said, “will give us strength for 2013 and beyond.”
The fall in profit in the last fiscal quarter was caused largely by $3.3 billion in charges for HP’s decision to kill its tablet and smartphone businesses, as well as other write-downs and acquisition costs.
Revenue in three of HP’s largest divisions, the personal computer, printers and ink, servers and networking, also dipped in the last quarter.
