H-P Woes Are 'All Very Fixable,' CEO Whitman Tells CNBC
By: Hewlett-Packard is in the early stages of a turnaround plan that will take four to five years, company CEO Meg Whitman told CNBC during an interview in which she asserted that the company is not too big.
Speaking the day after H-P warned investors of a decline in earnings for 2013, sending shares to a nine-year low, Whitman, who took over in January 2011, said it took a year to assess the myriad problems within the company.
Now, she said, the troubled tech firm can begin making the product changes needed to regain investor confidence.
"I'm confident that 2013 will be the bottom of the turnaround and then you can look forward to good growth in 2014 and 2015 as those products kick in," she told CNBC's "Squawk on the Street" program. "The investments we're making in things like (information technology) systems, in our sales organization, in training, those things will start to kick in and I really think 2014 is going to be quite a bright year for H-P."
As she touted her company's positives, traders remained unconvinced and pushed shares down another 4 percent.
The losses came as a slew of brokerages cut their price targets company stock, saying the weak economy will continue to weigh on share price.
Analysts expect revenue and margins to falter, increasing uncertainty about recent strategic decisions to focus on transforming the former tech powerhouse into an enterprise computing corporation that can take on IBM and Dell .
"HP's assumption of turning around the enterprise services business within one-two years looks aggressive, given the significant revenue decline and margin deterioration expected in fiscal 2013," BMO Capital Markets analyst Keith Bachman said.
Bachman, who cut his price target on HP's stock by $5 to $18, is a five-star rated analyst due to his earnings accuracy on HP, according to Thomson Reuters Starmine.
"Both PCs and printing are likely to be hurt by end users refreshing smartphones and tablets two-three times before refreshing a PC or printer," J.P. Morgan analyst Mark Moskowitz said.
The company has come under fire for its web of businesses that critics say is unmanageable and inefficient, causing slow growth in sales of computers and printers. (Watch: Cramer Says HP Should Sell Personal Computer Unit)
Corporate culture also has been a target, though Whitman said the company's 320,000 employees are its biggest strength.
"We've got a great set of assets here," she said. "I believe this is all very fixable. It's going to take time. There are no silver bullets. It's basic blocking and tackling. We know how to do this. Now we've got a road map and we're going to do it."
She touted the array of products, from personal computers, laptops and notebooks to copiers and data storage systems, as keys to the future.
But she acknowledged that growth amid a global economic slowdown will be difficult.
"Products are going to be a really important part of how we bring H-P back," she said. "Investors have got to look at the whole story and say, 'Gee, do I think this is something over the next couple of years that I can make a lot of money on?'"
—Reuters contributed to this report.
