HP predicts zero revenue growth in 2014
The technology giant shuffles top executives.
The world’s largest PC marker Hewlett-Packard (HP), which registered a fall of 8 per cent in net revenue for the third quarter of 2013, is not optimistic of achieving revenue growth in 2014.
For the third-quarter of 2013, the company posted net revenue of $27.2bn, in the wake of slowdown in global PC market.
Meg Whitman, CEO of HP, said: "Weak execution has amplified the market challenges we know exist. It's unlikely... that we’ll see the growth in 2014 that I had hoped."
Whitman also agreed that management errors in the enterprise group had led to a loss of 5 percentage points of market share in servers during the quarter.
Except the software division, all other HP units saw decline in revenues during the quarter. Personal systems, printing, enterprise group, enterprise services, and financial services divisions posted a fall in revenue of 11 per cent, 4 per cent, 9 per cent, and 6 per cent respectively on a year-over-year basis.
However, software division improved revenue by 1 per cent year-over-year with a 20.5 per cent operating margin.
During the quarter, the company returned to profit by earning $1.4bn, compared to a loss of $8.9bn for the same period last year.
Whitman added: "We are already seeing significant improvement in our operations, we are successfully rebuilding our balance sheet, our cost structure is more closely aligned with our revenue and we have reignited innovation at HP, with a focus on the customer."
The company’s weak performance also led to leadership changes. On Wednesday, Dave Donatelli was replaced by Bill Veghte to head Enterprise Group, which is HP's second-largest and most critical unit. Donatelli, considered to be a star executive, has been assigned to identify companies with initial stage technologies for acquisition.
In June, Whitman moved PC division head Todd Bradley to boost China unit. Going forward, HP will club its marketing and communications divisions under the leadership of chief communications officer Henry Gomez.
Meanwhile, HP shares fell by about 6 per cent in after-hours trading.