HP’s Whitman: Wait till 2014 for turnaround

HP’s(s hpq) turnaround effort won’t see results till 2014, HP CEO Meg Whitman said at the company’s analyst meeting on Wednesday.

“We believe that 2014 will be the year you will see real recovery and expansion at HP. You should see every business unit recover and grow. Our investments in R&D and IT will begin to kick in. And we will have demonstrated an ability to manage costs in line with revenue,” she said.

To be fair, Whitman has always characterized the turnaround attempt as a long-term journey, but analysts and the market must have hoped for more up-beat news: HP shares were hammered during the call, falling  8.44 percent to $15.69 at press time.

Company CFO Cathie Lesjak followed with a very bleak picture for HP’s FY 2013, which starts November 1.

“We expect continued weakness in the macroeconomic environment. We expect year-over-year revenue declines in all segments except software,” Lesjak said.

For FY 2013, revenue fall-off for the company’s Enterprise Services business will be in the 11 percent to 13 percent range and operating margins are expected to be in the 0 percent to 3 percent range.

The company now forecasts that FY 2013 earnings per share will come in between $3.40 to $3.60, compared to Wall Street estimates of $4.18.

Whitman listed a ton of tactical changes HP is making to cut costs and reduce confusion around HP’s profuse product lines — the company will cut the number laser printer models in half next year for example.

In general, HP is suffering from macroeconomic “headwinds” and years of befuddlement at the top, which Whitman referenced. “My belief is that the single biggest challenge HP has faced is the changes in CEOs. There have been multiple inconsistent plans and executional miscues limiting the speed of recovery,” she said.

Whitman said she sees FY 2015 as a year of “acceleration” and by 2016, HP “should have achieved market leadership in many areas and its financial metrics should by then grow as fast as the GDP and profit growing faster than revenue.” The question is how many investors and customers will stick it out that long.

To be sure Whitman was dealt a tough hand. She took over from Leo Apotheker in September 2011 after he’d been there for less than a year. Apotheker himself was brought in by the HP board to replace the ousted Mark Hurd.