Hewlett Packard announce loses of 8.8 billion. Another old world company misses the bus.

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.

HP. Losing 27,000 staff and 9 billion Dollars a quarter. A giant, but a giant of the old world order.

HP, Hewlett Packard, the former giant of computing (and a former client of mine) is losing people and losing money.

4,000 people left in its third fiscal quarter and they expect to lose about 11,500 employees this year and a total of 27,000 by the end of 2014 by merging divisions like bringing together their PC and Printer businesses. That's a lot of hurt.

It also made a historic loss (in the company's history) to the end of the quarter to July of nearly 9 billion usd. That's right, billion.

Whilst the company tells this as a streamlining of its business as its on the cusp of a turnaround, but to the great unwashed (you + me) it just seems like a huge, deepening hole. 

Printer sales were down 23%, revenues across the board were down as consumer products fell 13%. Whilst there's talk of new "tablets" and a new range of PC's this Autumn, which will have a "design focus" (oh dear, like Apple 8 years ago?) it all seems a little stale.

“HP is still in the early stages of a multi-year turnaround, and we’re making decent progress despite the headwinds,” Meg Whitman, HP president and CEO, said in an earnings release. “During the quarter we took important steps to focus on strategic priorities, manage costs, drive needed organisational change, and improve the balance sheet. We continue to deliver on what we say we will do.” That's Meg at the top of the blog and put any PR gloss on these numbers you like, but you can't get away from poor numbers like this.

What is happening of course, is that consumers want mobile computing, rather than PC's, and HP, well, they're not really at the races. Don't misunderstand me, this is a giant but a giant of the old world order.

HP seems to me, to have failed in generating new products, new innovation, new thinking, as consumers have changed quickly. A big ship is always slow to turn and HP is a classic example.

Bringing products late to market and massively reducing overheads through seeing off staff, is not a vision for the future. Nor will it achieve much except to keep the financials right short term and keep markets happy.

It strikes me too, that I can't see a real burning consumer loyalty or love affair with HP the brand, which once there was. Attempts at Advertising recently (like Plan B and Russell Brand campaigns) didn't do it for me anyway and for most, will be hard to remember. The brand just looks, boring.

CEO Meg Whitman may not exactly be the visionary of a Steve Jobs.
But she now, really really needs to be.