HP profit plummets as Windows PC market struggles, CEO Whitman urges patience

“Hewlett-Packard Co’s earnings fell nearly 44 percent and the world’s No. 1 computer maker forecast a second-quarter profit below Wall Street estimates as it struggles with weak sales of PCs and printers,” Poornima Gupta reports for Reuters.

“Chief Executive Meg Whitman, a veteran Silicon Valley executive who took the top job last September after the firing of Leo Apotheker, has been trying to turn around HP’s sprawling businesses. On Wednesday, she pleaded for a little patience,” Gupta reports. “‘If you look at business history and you look at companies which have gone through the kind of turnaround that we’re leading HP through right now, these things are not quick,’ she said, adding it could anywhere from two to five years.”

Gupta reports, “Fiscal first-quarter revenue fell 7 percent to $30 billion, slightly below Wall Street’s consensus estimate. Sales from the personal systems group, encompassing PCs, declined 15 percent, which executives blamed partly on a persistent shortage of hard drives globally – the result of flooding last year in Thailand.”

MacDailyNews Take: Meanwhile, Apple posted record Mac sales during the same quarter; the 23rd consecutive quarter in which the Mac outgrew the Windows PC market. That’s six years. But, keep blaming floods.

Gupta reports, “On Wednesday, HP reported net income of $1.47 billion for the fiscal first quarter, or 73 cents a share, down from $2.6 billion, or $1.17 a share, a year earlier.”

Read more in the full article here.

MacDailyNews Take: Just $1.47 billion profit on $30 billion in revenue? That’s a heck of a lot of work for not very much. Woeful, in fact. Seriously, why bother – unless your goal is to doom as many people as possible to inferior personal computing?

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40 Comments

  1. The news gets better and better.
    Let the pc junk peddlers continue to wither and die in a cloud of their own mediocrity. Thier tombstone will say failed to innovate and died choking on Apples dust.
    You can’t just buy low end crap from china that you did not innovate and slap your name on it. People expect more hell demand more. Do something new listen to your customers or someone else will.
    It’s a shame they just don’t get it and the CEO of the week is doing the exact same thing the last CEO did. Hint when going off a cliff flap your arms really really fast and hope for the best.

    1. It wasn’t always this way. I remember a time when HP made some world-class minicomputers, and their PCs were built to last.

      Once Carly forced the Compaq merger down their throats, the whole idea of HP quality was kicked to the curb.

      -jcr

    1. Some of the Thai disk plants have come back online, at least in a limited way. That excuse won’t last much longer. By CY Q2, Q3 at the latest, they’ll have to make up some other excuse.

  2. At least Microsoft got the word that educated intelligent people want hardware that has high performance at an affordable price.

    Balmer spoke at a developer conference (remember his “developers, developers, developers” rant.) in about 2008 and nearly every developer there had a MacBook Pro.

    The handwriting is on the wall that users want QUALITY. Try to interest a high school or college student in a schmaltzy Dell sub $1000 laptop today…it doesn’t fly.

  3. Reminds me of Atlas Shrigged. The incompetent always make excuses.

    Did Steve Jobs make an excuse when apple posted paltry profits? No, he celebrated.

    Give Meg a year or two and see if things have improved … But if she starts making excuses, it’s time to buy puts in HP.

  4. HPs problem is that they don’t make enough Tablets in the right size. HP should have an entire line of Tablets in all sizes and price ranges. Maybe come out with circular and triangular Tablets to differentiate themselves and establish a market presence. A women’s line with built-in make-up light and an app to suggest the right color of make-up. special features no one else has. That’s the deal!!! 🙂

    1. A positively brilliant idea! I can’t imagine why the focus groups missed it. I’ll be sure to bring it up the next time Meg and I are out shopping at Bergdorf’s. I might even suggest customizable trapezoidal tablets; that should appeal to the ubergeeks. Throw in a Siri knockoff to criticize your blush color, and we’re printing money!

  5. In 10 years, people will look back and realize that Apple won the PC wars.

    Apple made almost 10x the profit of HP, and almost 15x the profit of Dell. And, about 6x of the two combined.

    Heck, add in Microsoft’s profit and Intel’s profit and you get about $12.4B, which is still less than what Apple made last quarter.

      1. Let’s say Apple made $100, so 10% for HP is $10. With me so far? If Apple made the $100, Dell made 1/15th of that, or $6.66, but we’re not so evil, so let’s round that up to $6.67.

        HP’s $10 and Dell’s $6.67 combined, added together is $16.67….hang with me now, it gets tougher.

        Apple’s original $100 divided by 6 is…wait-for-it… = $16.67 (again, rounding up the $0.01 for niceness…)

        So, Q.E.D., from my ol’ doctoral days at the chalkboard…remember those..?), HP and Dell combined equalled 1/6 of Apple, or Apple was 6x greater than HP and Dell combined…phew…someone get me a drink.

        This new math is same as the old math. YMMV.

    1. It’s still encumbent on Apple to reclaim the market for personal computers which includes the Mac and iPad and maybe iPhone and iPod touch. In particular their Mac Marketshare should be north of 20-25% globally, with iPads in the 100s of millions per year.

      When that happens no one will be able to deny that they won. They are getting there but not there yet.

  6. Cloud computing, thin clients, and the paperless office. Makes it tough for desktop computer and printer manufacturers. Meg must be feeling the same thing buggy whip manufacturers felt a hundred years ago. Who stole my cheese?

  7. I’m besotted and benighted by having to use an HP at work- one of their plastic iMac wannabes. Besides the mostly useless candy that is Win7, the real problem is just that the unit itself is so slow and cranky. Always very happy to get home to my iMac.

      1. A better bombastic ‘b’ word:
        Bastinadoed

        Bas•ti•na•doed, | bastəˈnādō
        verb
        Tortured by way of caning the soles of the feet.

        Origin from late Latin bastum or ‘stick’.

        Usage: ‘I wanted a Mac by got bastinadoed with an HP.’

        From The Devil’s Dictionary, by Ambrose Bierce (1881-1906): BASTINADO, n. The act of walking on wood without exertion.

  8. Meg Whitman. How the f**k can you expect to keep up with the post-PC world when you have an old lady who knows NOTHING about where things are going? She probably knows how to fire people and talk to her secretary, but thats it.
    HP has WebOS – take it and run with it, develop apps, build small devices, license patents through FRAND, hire some young crazy coders and GET BUSY. Develop WebOS into an ALTERNATIVE to Windows/make the first real useable (by ordinary people) Linux distro.

    There are lots of spaces to be filled as MS slowly fades.

    NOT with the Meg Whitmans of this world – she is stuck in the 1950’s.

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