HP CEO Whitman: PC spin-off still in play, Autonomy deal too

HP CEO Whitman: PC spin-off still in play, Autonomy deal too

Summary: Whitman reiterated that "HP matters" and indicated that the grand plan for the company remains the same.

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New HP CEO Meg Whitman said the company's strategy, which revolves around a PC spin off, a purchase of Autonomy and finding value for WebOS, stands.

In her first words to analysts and investors, Whitman reiterated that "HP matters" and indicated that the grand plan for the company remains the same. She said HP would work on operations and hitting financial targets. Whitman said:

Going forward, HP will have no higher priority than to do everything in our power to meet the challenges of today's macroeconomic environment and frankly improve our operational and financial performance. At the same time, we have to deliver the world-class products, solutions, and services our customers have come to expect from HP. We understand that our performance is under intense scrutiny and we will take the necessary actions to get HP back on track. That isn't something we can do overnight. It's going to take time.

Whitman reiterated that she understands the investment community and the need to hit numbers, but believes the strategy is right. She added that HP has to determine whether it wants to spin off the PC unit "as fast as we can."

Related: HP's CEO carousel continues: Whitman officially in, Apotheker out

HP CFO Cathie Lesjak said the company is seeing soft sales in Europe and the public sector, but can hit its current earnings targets. However, there is "less certainty" on the revenue outlook.

Whitman and executive chairman Ray Lane argued that the company's strategy was on target. She added:

With regard to the potential spinoff of PSG, we're committed to doing work right now to determine the best path forward and we expect the board to make a determination by the end of the calendar year if not sooner. This decision is solely based on the value to and investors and value to customers. Second, the Autonomy acquisition is proceeding as planned and is expected to be completed by the end of the calendar year and third, we continue to explore options to optimize the value of WebOS software.

Topics: Mobile OS, Banking, CXO, Hardware, Hewlett-Packard, Operating Systems

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17 comments
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  • Insanity?

    Doing the same thing and expecting a different outcome
    Vendking
    • No, it is sanity: Apotheker plan was to save HP from consequences of the ..

      @Vendking: ... disastrous decisions of his predecessor, media/Wall Street darling Mark Hurd -- I mean throwing away billions for Palm and double failure with hardware/OS in attempt to enter tablet/smartphone market under John Rubinstein. In these failures would be allowed to continue, HP would register billions of dollar level of losses.
      DDERSSS
    • RE: HP CEO Whitman: PC spin-off still in play, Autonomy deal too

      @Vendking Agreed! Swapping Meg for Leo and NOT repudiating some of the bad decisions was the stupidest thing that the HP board could have done. Every time I think that HP has hit bottom, they come up with a new way screw up. Instead of being a vertical company challenging IBM or Oracle, HP will be broken up and sold off for parts. A savvy takeover group could buy it at $19 and sell off everything but the printer division for pocket change, and they would still make a ton of money.
      terry flores
  • So the board loved ...

    ... Apotheker's plan, but decided to make him a fall guy? To investors, "We got rid of the guy who developed the plan, but we are still going along with the plan."

    Were investors complaining about Apotheker's plan, or about Apotheker himself? Wasn't it Apotheker's plan? So then HP hasn't really changed anything. Sigh.
    P. Douglas
    • Obviously, CEO change is just PR turn-around; there was no reason to oust

      @P. Douglas: ... Apotheker -- he was very useful and saved HP from billions of losses that would be caused by Mark Hurd projects.

      However, PR needed the sacrifice.
      DDERSSS
  • PCs Are A Dead-End

    The PC business has been lop-sided for too long: Intel and Microsoft cream off huge profits, while everybody else in the chain has to make do with slim margins. That's not really sustainable to encourage innovation, which is why the innovation has now moved to ultramobile devices (smartphones and tablets), where Intel and Microsoft have no control.

    The smart money will move from the old businesses into the new ones.
    ldo17
    • where Apple skims off huge profits

      @ldo17 seems like the same old game to me.
      otaddy
      • RE: HP CEO Whitman: PC spin-off still in play, Autonomy deal too

        @otaddy
        It's not the same game, which is why Apple makes most of the profits in the mobile game.
        Theseus
    • PC manufacturing is a low-margin business

      @ ldo17<br><br>PC manufacturing is a low-margin business, like most mature manufacturing businesses. The touch-centric smartphone business is a relatively young one, and high-margin right now, but that will almost certainly change. As the market matures, commodity smartphone hardware running Android and perhaps Windows will put pressure on iPhone margins. It's more a matter of how quickly this will happen than whether or not it will happen.<br><br>As with cars, PCs or other mature manufacturing businesses, there will be room in a mature smartphone market for high-margin producers -- like Apple -- at the upper end. The bulk of the market, however, will probably comprise low-margin commodity goods, as is the case with PCs, cars, washing machines, etc. There's nothing particularly wrong with low-margin businesses either. As long as they provide returns above the risk-free rate, without introducing a great deal of risk, they can even be good investments.
      WilErz
  • RE: HP CEO Whitman: PC spin-off still in play, Autonomy deal too

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  • HP Destroying Itself

    As a long-time HP partner in the SMB space, we've spent the past few weeks realigning ourselves as a Lenovo partner, as it is clear that HP has no idea what it's doing. Bringing Whitman in as CEO confirms that we made the right decision, and I'm sure that we're not alone.
    NameRedacted
  • Just got this email

    Two sentences...

    Dear Valued Partner,
    ...
    ...
    We also want to reaffirm our commitment to the strategy HP announced earlier this year. We believe that unlocking the value trapped in information is the single largest opportunity for consumers, businesses & governments as well as our valued partners like you.

    ...
    ...
    We will continue to invest in our market leading servers, storage, networking, printing, PCs, software and services offerings. We expect that by executing on HP's strategic actions we will deliver greater value for our stockholders, broader solutions for our customers and you, as well as enhanced opportunities for our employees.
    ...
    ...

    Regards,
    Meg Whitman Ray Lane
    President and Chief Executive Officer Executive Chairman of the Board of Directors
    deep@...
    • RE: HP CEO Whitman: PC spin-off still in play, Autonomy deal too

      @deep@...

      This statement about "continuing to invest" just makes no sense in the context of earlier and repeated comments about spinning the whole division off.

      If I was in HP business sales, I would feel completely lost right now, with no certainty on the hardware front and no new software/services products yet ready to offer.
      mesanford
    • RE: HP CEO Whitman: PC spin-off still in play, Autonomy deal too

      @deep@... It's corporate gibberish. The words mean nothing, because they don't reflect any real thought or initiative.
      terry flores
  • Has HP gone nuts?

    I love my HP products. I worked for HP for a short time and well it has its problems for sure and voila now they are mighty big! Dell must be loving this! All I am reading of late makes little if any sense. To millions HP is no computers et al and you want to spin it off! Ugh Ugh is all I can say...
    rmacleod@...
  • RE: HP CEO Whitman: PC spin-off still in play, Autonomy deal too

    My condolences to H-P shareholders.

    Whitman, along with the incompetent Board of Directors with Andreesen at the helm, will likely drive the company into the dirt.
    Theseus
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