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HP Details Turnaround Strategy

[Techtaffy Newsdesk]

HP has detailed a multi-year roadmap to turn the company around. By 2016, CEO Meg Whitman said she expects the company’s revenues to be growing in line with gross domestic product (GDP), with operating profit growing faster than revenues, industry-leading margins and disciplined capital allocation.

HP had initiated a multi-year restructuring in May this year.

Meg Whitman (President and CEO, HP):  HP has a powerful set of assets, a culture of engineering innovation and a trusted brand. Now, we have to focus on bringing our incredible assets together to deliver for our customers, employees and shareholders.

Fiscal 2013 outlook:  HP estimates earnings per share for fiscal 2013 to be in the range of $2.10 to $2.30.

Business segment strategies

HP Enterprise Services:  HP anticipates revenue declines of 11 to 13 percent in fiscal 2013 with operating margins between 0 and 3 percent. The company says this is due to several factors, including exceptional runoff in four major accounts and selective pursuit of deals to ensure the appropriate margin structure.

HP Printing and Personal Systems:  HP PPS has been focused on consolidating supply chain functions and shrinking from six sales teams to three, while reducing functional support organizations from 12 to seven. In addition, the group is focused on simplifying the business by reducing the number of SKUs in the printing business by 30 percent and the number of platforms in the PC business by 25 percent by the end of 2014.

HP Enterprise Group:  By selling Converged Infrastructure, Converged Cloud and Software-defined Data Centers, HP expects to grow over the long term both revenue and market share in networking, storage and cloud, while increasing revenue from HP’s industry-leading x86 server business. The company’s Project Moonshot is developing new ultralow-power server technologies for the HyperScale server market.

HP Software:  HP is the world’s sixth largest software company.  HP Software is focused on integrating its acquired businesses and technologies with its existing software portfolio.

HP Converged Cloud update:  The company grew cloud revenue 39 percent in 2012 to nearly $4 billion. Estimated cloud revenue for the company would continue to grow, reaching $8.4 billion by 2015.

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