Meg Whitman is a star CEO. She built eBay from 30 employees to 15,000 employees. The New York Times hailed her as a potential first woman President of the United States. She ran to become Governor of California, but lost to Jerry Brown. In January 2011, Hewlett-Packard fired its CEO Leo Apotheker and brought in Meg Whitman as the new CEO to fix the company. She’s obviously had plenty of past success, but has that carried over during her tenure as head of H-P?
Wednesday, after the market close, Hewlett-Packard HPQ reported earnings. As I listened to the conference call, it became obvious that so far Meg Whitman is not succeeding. Take a look at the following statistics:
- Notebook units were down 14%.
- Desktop units were down 9%.
- Revenue for the PC segment fell 11%; consumer revenues fell 22% and commercial revenues fell 3%.
- Printing revenues fell 4%.
- Enterprise Group revenues fell 9%.
- The company has been emphasizing software, but software revenue was up an anemic 1%.
- Traditional storage-device revenue fell 37%.
- X86 server revenue fell 7%.
So far, Meg Whitman’s plan to contain the decline in legacy businesses and position the company in high-growth businesses is not working. It is not a surprise that she did a management shakeup. The present COO Bill Veghte will become the general manager of the Enterprise Group. There are no plans to bring in a new COO.
It is hard to see how this and other announced management changes will help solve the company’s problems. In the conference call, the company admitted that year-over-year revenue growth in fiscal year 2014 is unlikely….Read more at MarketWatch