Another sign of the times, HP (Hewlett Packard) have announced very bad numbers. Whilst most were expecting a profit of 2.2 billion usd, it actually was a loss of 8.8 billion. Its shares are in downward mode nearly at 2001 levels.
Like Sony, Sharp, Panasonic and others, HP is again an "old world" brand that is being killed by lack of innovation in the digital space.
Blogged here http://streamabout.blogspot.ie/2012/04/sony-64billion-loss-and-death-of-brands.html and here http://streamabout.blogspot.ie/2012/11/sony-sharp-panasonic-brands-in-shocking.html
Acquisitions of Palm and Autonomy (which they paid nearly 80% more than the market cap at the time - 11 billion usd, last October) have gone badly. Last night they claimed Autonomy had overstated numbers and inflated values and to whit, they were informing the fraud office. The former co-founder of Autonomy, an Irishman, dismissed the claims and said the acquisition has simply been mismanaged by HP. However, either way HP didn't do their due diligence properly or are trying to divert attention following awful numbers. HP has shut down Palm. Those acquisition write-downs (5 billion) have contributed to these awful results.
But they do not account for the revolving doors of CEO's, constant management turnover and poor product design/marketing. Poor form too of Meg Whitman current CEO (and former head of Ebay) to blame past colleagues for the Autonomy purchase yesterday when it was approved by the overall Board who are still there. Nor the reductions in net revenue - which is where Whitman should be focused, surely. After all, it's the 5th straight quarter of decline.
Revenue in all its business units declined and most notably by -14% in its personal computing - the place where everyone else sees opportunity.
None of that has anything to do with Palm or Autonomy, now does it.
HP are now claiming that they're committed to "new products". A little after the horse has bolted don't you think? One analyst described it all as a "train wreck" on Reuters.com. The headline in the HP story on Wall Street Journal is, "analysts throw in the towel". It has become hard to read company expectations with results like this which are so much at variance from expectations. And the brand is just, well, boring.....and I used to look after their advertising once upon a time.
Whitman said today that they were "one year into a five year journey" but I'd except to see a lot of people stop travelling. Notably investors and you'll now see downgrades and sell/neutral recommendations.
So many times I've blogged and blogged about companies like these.
They just don't get the revolution that's upon them and don't get on board. With about 300,000 employees they've already planned to shed 27,000 whom deserve better which you can read here http://streamabout.blogspot.ie/2012/08/hp-losing-27000-staff-and-9-billion.html
What a pity for what was once, a great company.
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