HP CEO Meg Whitman Asks Wall Street For Patience
A downbeat forecast by Hewlett-Packard is casting doubt on the company's turnaround plans. CEO Meg Whitman says the company's earnings will take a hit in the coming year before its comeback strategy can take hold.
STEVE INSKEEP, HOST:
NPR's business news starts with rough times at HP.
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INSKEEP: Hewlett Packard was once a giant among the tech firms of Silicon Valley and now it is struggling. The company's latest CEO says profits at HP will continue to plummet.
NPR's Steve Henn reports that HP's stock now trading near its lowest price in a decade.
STEVE HENN, BYLINE: It has been a brutal two and half year stretch for Hewlett Packard. The company has had multiple rounds of layoffs. It's on its third CEO and its stock has lost two-thirds of its values since early 2010.
When Meg Whitman took the reins a year ago, she promised a turnaround. Yesterday she asked Wall Street for patience.
MEG WHITMAN: The problem that has happened to HP over the last three years is a new CEO would come in tumble the investments...
HENN: And derail innovation, she said.
WHITMAN: This start/stop of the last three years, you can't run a railroad that way. You don't end up with the products that are ahead of the market, you end up either not delivering the products or someone else gets there first.
HENN: But HP's problems go beyond chaotic corporate management, according to Joshua Shapiro, managing director of Princeton Analytics - a technology consulting firm. He says HP is afraid to take real risks.
JOSHUA SHAPIRO: Everybody wants to be innovative - or so they claim - but in truth innovation is really scary; it's actually terrifying.
HENN: And Shapiro says, instead of building new products, HP has spent the last decade and tens of billions of dollars buying companies - many of which have failed to thrive.
Steve Henn, NPR News, Silicon Valley. Transcript provided by NPR, Copyright NPR.