Finally, Whtman wants HP to design another smartphone, something it did two years ago after buying Palm Inc. only to scrap the device after a few months on the market. HP’s return to the smartphone business isn’t planned for next year, though.
Whitman also is lacing big bets on “cloud computing” _ a term that refers to the increasingly popular trend of storing software applications in remote data centers that are accessed over the Internet instead of installing programs on individual machines.
HP also is angling for a bigger piece of the “Big Data” market, a field devoted to helping companies and government agencies navigate through the torrent of information cascading through Internet-connected devices.
But the payoff from those initiatives won’t come in HP’s fiscal 2013, which starts Nov. 1.
The company, which is based in Palo Alto, Calif., expects its earnings for fiscal 2013 to range from $3.40 to $3.60 per share, after stripping out charges for layoffs and other accounting measures unrelated to its ongoing business. The projection translates to an 11 percent to 16 percent drop from the adjusted earnings of $4.06 per share that HP expects to deliver in its current fiscal year.
Whitman’s forecast for next year caught investors off guard because analysts, on average, had predicted HP’s adjusted earnings would be $4.17 per share.
HP shares shed $2.22 to close Wednesday at $14.91. The stock price has fallen by 35 percent since Whitman became CEO last September.
Next year’s revenue also will decrease, although HP didn’t say by how much. The biggest problems will be concentrated in HP’s technology consulting division, where revenue is expected to fall by 11 percent to 13 percent next year. Technology consulting also faltered during the past year, prompting HP to absorb an $8 billion charge to account for the diminished value of Electronic Data Systems, which HP bought for $13 billion in 2008.
The EDS charge is the main reason that HP lost $8.9 billion during its most recent quarter, which ended in August. Some analysts are worried HP will have to absorb another charge on an $11 billion acquisition of software maker Autonomy, which hasn’t lived up to expectations since the deal closed last year. HP bought EDS while it was being run by Mark Hurd, who resigned in 2010 after the company’s board raised questions about his expense reports. The company agreed to buy Autonomy during the reign of Leo Apotheker, who lasted less than a year as CEO before being replaced by Whitman.
“There are no silver bullets to solve our challenges,” Whitman said Wednesday. “We will solve our challenges through consistency of leadership, focus, good blocking and tackling and, most importantly, great products and services delivered in the way that customers want to buy them.”
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