HP profits drop by 16pc, but CEO Whitman confident about turnaround

22 Feb 2013

HP president and CEO Meg Whitman

HP, the world’s largest maker of PCs, has reported a drop of 6pc in fiscal first-quarter sales, as demand for both printers and PCs declined, but CEO Meg Whitman is confident the company’s turnaround plan is starting to gain traction.

HP’s fiscal first-quarter revenue fell by 5.6pc to US$28.4bn. Net income dropped by 16pc to US$1.23bn in comparison to a net income of US$1.47bn a year earlier.

Revenue at HP’s personal systems division fell by 8pc to reach US$8.2bn, with sales of desktop units up 10pc and sales of notebooks down 14pc. Meanwhile, revenue at HP’s printer division fell by 5pc to reach US$5.9bn.

Last year, Whitman announced a multi-year restructuring plan included reducing HP’s workforce by 27,000 people – 8pc of its workforce – by the end of 2014.

The restructuring had been projected to generate annualised savings of US$3bn- US$3.5bn.

Whitman said yesterday this restructuring plan is starting to show results.

“While there’s still a lot of work to do to generate the kind of growth we want to see, our turnaround is starting to gain traction as a result of the actions we took in 2012 to lay the foundation for HP’s future,” said Whitman.

“Our primary focus is to deliver on the full-year outlook, and I feel good about the rest of the year,” she added.

Whitman said HP would be bringing a number of new programmes and “disruptive innovations” to market over the coming year.

“We expect the benefits from our restructuring will accelerate through fiscal 2013,” she said.

Carmel Doyle was a long-time reporter with Silicon Republic