Tuesday, June 4, 2013

CEO Meg Whitman’s Turnaround Plan For HP

The chief executive officer of Hewlett-Packard Co., Meg Whitman today announced to raise its earnings outlook for 2013 to boost its personal computer sales with the aid of enterprise computing services. As the recent quarterly results reflected the dwindling computers sales, the company raised its earnings outlook based on the turnaround plan provided by Whitman. The shares for HP gained a 14 percent hike after it projected its full-year earnings per share. The company also projected the fiscal third-quarter profit to top the analysts’ estimates.

Meg Whitman aims to recapture the former growth of the world’s largest PC maker and hopes to increase its shrinking personal computer sales figures. The company has already received a positive response from its investors. As stated by Cathie Lesjak, the chief financial officer of HP, the investments are another great deposit in their venture to make the turnaround successful. She added that the printing units and enterprise services are a bit ahead in the competition, which has further helped the company to improve its gross margin during the quarter.

Earlier, the company reported that revenues had significantly fallen, with a major decline in the personal computers segment. The sales figure from the company’s leading PC focused business unit had fallen by 20 percent to $7.58 billion. As a result, the company is focusing on massive cost cutting, pushing for layoffs and writing off its EDS services business. The company is also striving to expand its business into areas that have long-term potential such as enterprise computing services.

A year earlier, the net income of HP had dipped to $1.08 billion from $1.59 billion. However, by the second quarter, the company had steadied itself to an operating revenue of $27.6 billion. For its fiscal third quarter, it is estimated that the company’s non-GAAP earnings per share would rise from 84 cents to 87 cents, a bit higher than 83 cents that was projected by Wall Street analysts. As investors gradually earned back the confidence on HP, the share prices also rose to 51 percent in 2013.