Hewlett-Packard Co. announced a massive drop in quarterly profits amid more than a year of harsh waters. For this past fourth period ended Oct. 31, 2011, H-P’s revenue dropped 3% and net income plummeted 91%.
Newly appointed CEO, Meg Whitman, stated “We didn’t live up to our expectations in 2011” and that H-P is looking to get “back to the basics of executing business fundamentals”.
During mid-August, H-P announced it would look into a spinoff PC business and use over $10 billion to acquire a software company. After stock dropped 20% and then CEO Leo Apotheker was canned, Meg Whitman came to the rescue. Former eBay Inc. chief and H-P board member stepped in and stated her top priority is to restore stability.
Among having to cope with a struggling company, Whitman also has to face flooding in Thailand which is causing shortages for hard drives. Expect to see higher end computers to be coming from HP production as well as higher prices in order to compensate for the shortage.
For the foreseeable future, expect a very cautious strategy from HP…no crazy growth and acquisitions; however with a grounded CEO with a solid reputation should bring this company out of the rut it is in. With other PC companies performing well, HP is going to have to get itself back on track before it falls behind its competitors.