HP Says More Cost-Cutting Ahead
Computer maker Hewlett-Packard still has more cost-cutting ahead, even after a massive restructuring that began last year and sliced the company's work force by 10%, Chief Executive Mark Hurd told analysts.
Addressing Wall Street analysts in a meeting broadcast over the Internet, Hurd said HP would continue to look for expense reductions while it retools its sales strategies and makes other moves aimed at improving the company's overall position (Tech Check: HP: World's Largest PC Maker).
"We have a lot more cost to take out," Hurd said. "We are a company that is transforming--we are not a company that is transformed."
Hurd already is credited with sparking a dramatic turnaround at HP in less than two years at the helm; HP's stock price has doubled. Beginning in July 2005, HP cut 14,500 jobs and overhauled its retirement plan, a move aimed at saving $1.9 billion a year.
But Hurd said those moves alone have not made the company as efficient as it could be.
"I wish it were that easy," he said. "We have more work to do."
Hurd appeared to dismiss speculation that HP might buy network security provider Symantec. He said that after HP's $4.5 billion acquisition of software maker Mercury Interactive this year, the company would likely engage only in "targeted" mergers and acquisitions.
"You should not be expecting us to do huge transactions," he said.
HP Chief Financial Officer Robert Wayman, who announced retirement plans Monday, reiterated the company's prior earnings and revenue guidance for fiscal 2007, which ends Oct. 31.
He also released the company's first public forecast for 2008, saying revenue would likely fall to between $101 billion and $103 billion, with earnings per share between $2.78 and $2.98. Wayman said that implied no big swings in international currencies and only modest acquisitions.
His forecast was generally in line with the consensus expectations of analysts surveyed by Thomson Financial, who were projecting profit of $2.88 per share on revenue of $102 billion. At that level, HP would likely keep its recently attained status as the world's largest technology company by revenue.