HP sets 2009 targets; Says its IT revamp 'halfway there'
Updated to reflect 2009 outlook, IT consolidation: Hewlett-Packard CFO Cathie Lesjak on Tuesday set the company's outlook for 2009 and updated analysts on its effort save on its technology infrastructure.
Lesjak said the company expects fiscal 2009 revenue growth of 5 percent to 6 percent from 2008 to $117.1 billion to $118.2 billion. Earnings excluding charges for fiscal 2009 is expected to be $3.74 a share to $3.84 a share.
Those targets for 2009 are in line with expectations. According to Thomson Financial, HP is expected to report 2009 revenue of $117.9 billion with earnings of $3.79 a share.
Analysts asked CEO Mark Hurd and Lesjak whether a potential recession would impact HP's plans. Hurd said HP will be focused on growing and cutting costs further no matter what the economy does. "For us it's about the stuff we can control," said Hurd.
A big part of HP's ongoing efforts to become more efficient is IT spending. To that end, Lesjak noted that HP's IT overhaul is "halfway there."
Specifically, Lesjak noted that HP has completed the buildout of its six next-generation data centers and has consolidated older ones. Lesjak added that HP has doubled storage capacity, cut energy consumption by 60 percent and cut networking costs. The goal is to save $1 billion in expenses from IT consolidation.
Lesjak also added that HP is looking at its real estate costs closely. Why? "Mobile people don't come into the office as much anymore," she said.
Also on the expense front, Lesjak noted that HP is using its girth to get the best pricing from suppliers. "We're the largest customer of most of our suppliers. We opt to get the best price on planet earth. We work with suppliers day in and day out to get the best price," she said.
HP also reiterated that it expects revenue to be about $111.5 billion for fiscal 2008 with earnings in line with current Wall Street expectations. HP expects to report fiscal 2008 earnings of $3.12 a share to $3.17 a share. Excluding charges earnings for the year will be $3.32 to $3.37 a share.
Thomson Financial projects earnings of $3.37 a share for 2008 on revenue of $111.9 billion. Here's HP's 2008 outlook.
And here's a deeper dive on HP's 2008 plan.
