REFILE-HP CEO sees revenue stabilizing in 2014; stock jumps

Wed Oct 9, 2013 12:36pm EDT

By Poornima Gupta

SAN JOSE Oct 9 (Reuters) - Hewlett Packard Co Chief Executive Meg Whitman said on Wednesday she expected revenue to "stabilize" in 2014 and business to accelerate again in 2015, sparking the stock to jump as much as 9.5 percent.

Whitman's comments to analysts at the company's annual investor briefing eased concerns about her multiyear turnaround program. Whitman said she was comfortable with the progress of her plan.

HP shares were up 5 percent at $21.75 in mid-day trade after surging to a high of $22.76 earlier.

"This time last year I was feeling HP was falling dangerously behind," Whitman said. "Our business units lacked a clear crisp integrated strategy. Our innovation pipeline was there but wasn't being commercialized."

"In 2013 we started to change that," she added. "Our multiyear journey continues. I am comfortable with the progress we are making."

Whitman said when she joined HP, operations were in disarray, with the sales team lacking modern tools and an information-technology infrastructure.

Whitman said there was progress generating cash flow and stabilizing some parts of HP's business such as Enterprise Services. The company generated a total of about $7 billion in free cash flow through the fiscal third quarter of 2013, she said.

Two years into what she has always described as a five-year effort, sales and profits are still sliding, and Wall Street is losing patience. The stock has fallen 17 percent in the past three months and lost more than half its value since 2010.

While HP's massive but stagnant printer division made money, the personal computer business has been contracting as more customers switched to tablets and mobile devices. Whitman wants to turn HP into a major player in the corporate technology services market, now dominated by Oracle Corp, International Business Machines Corp and Cisco Systems Inc.

Whitman, who has been known to take a hands-on approach with corporate customer, stressed that need again on Wednesday.

"This year alone I met with close to 1,000 customers and partners," Whitman said.

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