HP to Focus on Consistent Growth
Hewlett-Packard Co., the world’s No. 2 computer maker, plans to aggressively repurchase stock and focus on consistency after an uneven performance over the last couple of years, executives said Tuesday.
“Our focus now is on delivering consistent execution, quarter after quarter,” Chief Executive Carly Fiorina said at the company’s annual meeting with financial analysts in Boston.
“We absolutely have the right portfolio, the right strategy, the right products and we’re playing in the right markets,” she said, adding that the board had rejected breaking up the company three separate times in the past.
The second-largest computer maker and biggest printer maker has a record of uneven performance since its May 2002 acquisition of Compaq Computer Corp.
HP had a large revenue and profit shortfall in its fiscal third quarter ended July 31, with problems attributed to mismanagement in its computer server and storage business and difficulties with a software installation to manage its supply chain. The Palo Alto company says it has fixed those issues, and HP rebounded in its fiscal fourth quarter, with profit up 27% and record revenue in every business.
HP Chief Financial Officer Bob Wayman told analysts that the company planned to buy back $2.9 billion in stock, using up the current authorization this fiscal year.
Stock repurchases would depend on the share price, repatriation of cash held overseas and other factors, he said, and could exceed the $2.9 billion.
Fiorina said at the annual meeting that HP would not be providing specific financial targets or goals during the company’s analyst meeting. “We are going to talk all about execution,” she said.
Merrill Lynch analyst Steve Milunovich, who has repeatedly called for the breakup of HP to free its lucrative imaging and printing business, again raised the issue in a question to the CEO.
Fiorina defended keeping the Silicon Valley company intact. She argued that its businesses could benefit from one another, such as by bundling sales of services, hardware and software.
“So many of the growth opportunities that are going to drive the business going forward now depend on the power of this portfolio,” Fiorina said, referring to HP’s four main businesses of servers and storage, services, personal computers and imaging and printing.
“The board has looked at this analytically and dispassionately and in detail three separate times,” Fiorina said, noting that the board’s makeup was different on each occasion. “And each time the board ... came to the same, unanimous conclusion.”
HP shares fell 25 cents to $21.08 on the New York Stock Exchange.
