SAN FRANCISCO – Hewlett-Packard offered a 2013 earnings outlook on Thursday that underscored slow progress on CEO Meg Whitman's turnaround plan and decelerating technology spending worldwide, sending its shares to a nine-year low.
Shares in the largest U.S. technology company by revenue plummeted as much as 7 percent after it forecast earnings, excluding certain items, of between $3.40 to $3.60 a share in fiscal 2013.
Chief Executive Meg Whitman on Wednesday blamed unprecedented executive turnover in past years for dragging out the turnaround of the sprawling Silicon Valley computing giant.
Whitman, who became HP's third CEO in as many years after taking the helm from an abruptly dismissed Leo Apotheker, is trying to revitalize the former industry icon via layoffs, cost cuts, and expansion into areas with longer-term potential such as providing enterprise computing services.
Apotheker's 11-month tenure was marked by an acceleration of departures from various divisions, such as networking chief Marius Haas, as he brought in former coworkers from SAP AG.
"My belief is that the single biggest challenge facing Hewlett-Packard has been changes in CEOs and executive leadership, which has caused multiple inconsistent strategic choices and frankly some significant executional miscues," Whitman told investors at an annual conference in San Francisco.
"This is important because as a result it is going to take longer to right this ship than any of us would like," she added.
HP, like rival Dell Inc, is trying to transform itself into a major enterprise computing provider in the mold of IBM Corp, while slashing expenses to boost the bottom line.
The company is laying off 29,000 employees over the next two years, has written off $10.8 billion that was mostly related to the writedown of its EDS services business, and its business continues to be hit by a slowing in corporate spending and personal computer demand worldwide.
Whitman vowed to reduce the number of product offerings and cut costs as it tries to recover in a worsening macro-economic environment. She has said it will take five years for the turnaround to be effective.
"All of this is fixable but it is going to take some time," she said.
The company's recovery will start becoming visible in fiscal 2014 with all of the current investments paying off, she said.
"FY 15 will be the year of acceleration," Whitman said. "Revenues should be growing faster than cost."
HP's stock was down 7.5 percent at $15.84 in midday trade.
(Reporting By Poornima Gupta and Edwin Chan; editing by Tim Dobbyn and Andrew Hay)