SAN FRANCISCO - Coming off the biggest quarterly loss in Hewlett-Packard's history, CEO Meg Whitman braced investors for even more trouble ahead as she methodically tries to fix a wide range of longstanding problems. Those challenges will be compounded by a feeble economy that Whitman expects to weaken even more during the next year.
HP said the internal and economic turmoil will cause its earnings to fall by more than 10 percent next year, a decline that hadn't been anticipated by analysts who follow one of the world's largest - and most dysfunctional - technology companies.
Whitman delivered the disappointing forecast Wednesday at a meeting that the ailing Silicon Valley pioneer held for analysts and investors. The gathering gave Whitman the opportunity to persuade Wall Street that she has come up with a compelling strategy for turning around HP one year after being named CEO.
In this March 9, file photo, Hewlett Packard CEO and President Meg Whitman speaks at a conference on the Stanford University campus in Palo Alto, Calif. Hewlett-Packard Co. is expecting earnings to fall by more than 10 percent next year as CEO Meg Whitman struggles to fix a wide range of problems in a weakening economy. Whitman delivered the disappointing forecast Wednesday, at a meeting that the ailing Silicon Valley pioneer held for analysts and investors.
Investors evidently didn't like what they heard. HP's stock plunged 13 percent after Whitman's presentation, shoving the company's shares to their lowest level in nearly a decade.
HP's troubles stem from a combination of managerial malaise, high-priced acquisitions that haven't paid off and an inability to offset the damage done to its personal computer and printer divisions by the rising popularity of smartphones and tablet computers.
Whitman maintained that she inherited a bloated, poorly managed company that hasn't been innovating quickly enough in any of its divisions, which span from PCs and printers to software and data storage.
In a recurring theme during her tenure, Whitman said that she will instill the discipline, focus and accountability needed to rehabilitate HP, but she reiterated that the recovery will take several years to complete.
It could be 2015 before Hewlett-Packard Co.'s revenue growth begins to accelerate again, according to Whitman. By 2016, she envisions HP's revenue increasing as the same pace as the U.S. economy's overall growth, with earnings rising at a faster clip.
"It is going to take longer to right this ship than any of us would like," Whitman said.