HP Says More Cost-Cutting Ahead
Now that the company's past the pretexting scandal, company returns to work on last year's plan to cut 14,500 jobs and overhaul its retirement packages.
- By The Associated Press
- December 11, 2006
Computer maker Hewlett-Packard Co. still has more cost-cutting ahead,
even after a massive restructuring that began last year and sliced the
work force by 10 percent, Chief Executive Mark Hurd told analysts Tuesday.
Addressing Wall Street analysts in a meeting broadcast over the Internet,
Hurd said HP would continue to look for expense reductions while it retools
its sales strategies and makes other moves aimed at improving the company's
"We have a lot more cost to take out," Hurd said. "We
are a company that is transforming -- we are not a company that is transformed."
Hurd already is credited with sparking a dramatic turnaround at HP in
less than two years at the helm; HP's stock price has doubled. Beginning
in July 2005, HP cut 14,500 jobs and overhauled its retirement plan, a
move aimed at saving $1.9 billion a year.
But Hurd said those moves alone have not made the company as efficient
as it could be.
"I wish it were that easy," he said. "We have more work
Hurd appeared to indirectly dismiss rumors that HP might buy network
security provider Symantec Corp. He said that after HP's $4.5 billion
acquisition of software maker Mercury Interactive Corp. this year, the
company would likely engage only in "targeted" mergers and acquisitions.
"You should not be expecting us to do huge transactions," he
HP Chief Financial Officer Robert Wayman, who announced retirement plans
Monday, reiterated the company's prior earnings and revenue guidance for
fiscal 2007, which ends Oct. 31.
He also released the company's first public forecast for 2008, saying
revenue would likely fall between $101 billion and $103 billion, with
earnings per share between $2.78 and $2.98. Wayman said that implied no
big swings in international currencies and only modest acquisitions.
His forecast was generally in line with the consensus expectations of
analysts surveyed by Thomson Financial, who were projecting profit of
$2.88 per share on revenue of $102 billion. At that level, HP would likely
keep its recently attained status as the world's largest technology company