Warning sinks HP stock
Hewlett-Packard Co.’s shares plunged to a nineyear low on Wednesday after chief executive Meg
Whitman warned of an unexpectedly steep earnings slide in 2013, with revenue set to fall in every business division except software.
Wall Street had hoped for quicker signs of progress on Whitman’s turnaround plan, which centres on transforming the former industry powerhouse into an enterprise computing corporation.
But Whitman, who took the helm of HP just over a
year ago, told investors at an annual HP presentation that the company’s recovery will start to become visible only in fiscal 2014, when investments begin to pay off.
She blamed unprecedented executive turnover in past years for dragging out the Silicon Valley company’s turnaround.
Shares in HP, the largest U.S. technology company by sales, dived as much as 11 per cent, marking the biggest single-day decline
since August 2011.
The company has lost almost two-thirds its value since 2010. Its market value now stands just over $30
billion.