It's been a big day for Hewlett-Packard as the beleaguered tech company has announced major leadership alterations intended to revive a flailing balance sheet -- much like the third quarter report published earlier on Wednesday.
CEO Meg Whitman took to the digital airwaves after market close to discuss the reorganization as well as what else is in store.
Describing 2013 as HP's ongoing "fix and rebuild year," Whitman initially hinted during the conference call that 2014 will produce better numbers.
Yet later, she admitted that "total company year-over-year revenue growth in fiscal 2014 is unlikely."
HP chief financial officer Cathie Lesjak said that an updated fiscal 2014 outlook will be provided on September 9.
A big part of the rebuilding strategy means shifting around parts that haven't been performing as well.
To recall, here is how HP is shuffling the deck, effective immediately:
- HP's chief operating officer Bill Veghte is taking over as executive vice president and general manager of the enterprise group. That role is being expanded to include oversight for HP's cloud portfolio.
- That unit's previous leader, Dave Donatelli, is moving onto a "new role" focused on identifying early-stage companies with new technologies similar to Moonshot and StoreOnce. He will continue to report to Whitman.
- HP is combining its marketing and communications teams into one big group led by current CMO Marty Homlish. His new title is "chief customer experience officer." The new role has been set up to focus on "driving more consistent and high-value interactions with customers across all business units."
- Chief communications officer Henry Gomez take over for Homlish as chief marketing officer, although he will be responsible for overseeing both marketing and communications initiatives.
One piece of the puzzle that still looks missing: HP specified there are "currently no immediate plans to select a new COO after Veghte transitions to his new role."
Whitman stressed in the announcement that "one of the benefits of having a deep and talented executive bench is that you can put people with the right skills in the right jobs at the right moments," adding that these changes will speed up HP's "journey to a successful turnaround."
When asked during the call about why HP continues to make internal leadership changes without tapping external talent, Whitman replied she prefers to promote from within, explaining further that while she appreciates "fresh ideas," she wants people who "don't have to start at the beginning of the learning curve."
Nevertheless, Whitman didn't shy away from admitting where things still need to turnaround.
Although revenue was down for both of these groups, Whitman cited out that printing hardware unit shipments grew for the first time since 2011, and she remarked that the enterprise services business is starting "to stabilize."
As for where HP needs to make strides still, here is what Whitman and Co. have in mind:
- Growing networking business in China, where revenue remained relatively flat.
- Enterprise group (services and software) profitability; Whitman specified that fixing execution of strategies in this department will be Veghte's top priority in his new role.
- The PC business, although Whitman lamented that she didn't expect it to take this long for the entire PC industry to stabilize either.
As for the present, HP shares slipped initially by 2.5 percent in after-hours trading after the Q3 earnings report hit the wires.
Shares continued to drop following Whitman's comments during the call.
Slide via HP Investor Relations