PALO ALTO, Calif. (AP) — Since becoming Hewlett-Packard Co.'s CEO 11 months ago, Meg Whitman has repeatedly made it clear that it will take a long time to turn around the company. Whitman has already prescribed some harsh medicine by setting out to eliminate 27,000 jobs and replacing some top executives. In response to an analyst's question during a Wednesday conference call to discuss the company's fiscal third-quarter results, she listed a litany of challenges still facing HP.
QUESTION: As we think about rolling forward to 2013, with the pace of reinvestment in terms of taking HP where you want it to be, will that require earnings per share to decline, year over year, in 2013?
ANSWER: Let me just sort of elevate all the way back up here, and just try to give you some perspective on the situation that I see at HP now having been here nearly a year.
So, first is, we are facing some macroeconomic trends: Western Europe, the United States, China and the consumer broadly. From an industry perspective, we've got changes where tablets is a growing part of the consumer device business. We've got some challenges around consumer printing, and we've got pricing pressure across the board, which means we need to adjust our cost structure to be able to compete.
You know, sometimes folks say to me, "Well, I'm sure the competitors' are losing money." Actually, they aren't, and we need to make sure that we have a cost structure that allows us to be successful in all parts of the world in all of our businesses
And then we've got some execution challenges. And HP had some very serious challenges and headwinds when I first got here. And we've made progress on many things, but there are still some very serious execution issues in this business. And whether that is improving sales and delivery in (the enterprise solutions division), whether that is getting the pipeline conversion to where it needs to be in software, whether that is our ability to compete successfully in (computer servers), whether that is fixing the weak supplies demand in (the printer division) ... . We are the acknowledged category leader (in printing) and we've got some weakened competitors and we need to go after them. And we also need, as the category leader, we need to grow the relevance of printing, which you've seen us begin to do in some of the advertising that we've done and explain the difference between our ink and (remanufactured) ink and our toner and (remanufactured) toner.
And, then lastly, sales in my view is not where it should be. I think we've done the right things in reorganizing sales management. I'm excited about that. But we've got to improve our aggressiveness. We've got to improve our go-to-market. And we've just got to get a lot more aggressive and with a much more, shall I say, focused accountability model that we enforce on a day-to-day basis. So when we look at 2013, we're going to tumble all of the pluses and the minuses. We're going to put in the investments that we think are required, and yet we have to have a cost structure that allows us to win in the marketplace. So, we'll have a crisp view of that by 2013.
