Does HP have a future beyond printers?
CEO Meg Whitman said Wednesday that she expects Hewlett-Packard's revenue to "stabilize'' next year and that business would accelerate in 2015.
HP shares jumped as much as 9.5 percent after her comments, made to analysts at the company's annual investor briefing. They were up 5 percent in midday trading, at $21.75, after surging to $22.76.
Whitman's remarks eased concerns about her multiyear turnaround program.
"This time last year I was feeling HP was falling dangerously behind,'' Whitman said. "Our business units lacked a clear, crisp, integrated strategy. Our innovation pipeline was there but wasn't being commercialized."
But the company started to change this year, she said, adding, "Our multiyear journey continues. I am comfortable with the progress we are making.''
When she joined HP, Whitman said, operations were in disarray, with the sales team lacking modern tools and an information technology infrastructure.
HP had made progress generating cash flow and stabilizing some businesses, such as enterprise services. It generated about $7 billion in free cash flow through its fiscal third quarter, she said.
But two years into what Whitman has always described as a five-year effort, HP's sales and profits are still sliding, and Wall Street is losing patience. The stock has fallen 17 percent in the past three months and since 2010 has lost more than half of its value.
While HP's massive but stagnant printer division made money, its personal computer business has been contracting as customers switched to tablets and mobile devices. Whitman wants to turn HP into a major player in the corporate technology services market, now dominated by Oracle, International Business Machines and Cisco Systems.
Known for taking a hands-on approach with corporate customers, she stressed that need again Wednesday.
"This year alone, I met with close to 1,000 customers and partners,'' Whitman said.