Hewlett-Packard Co's shares plunged to a nine-year low on Wednesday after Chief Executive Meg Whitman warned of an unexpectedly steep earnings slide in 2013, revenue set to fall in every division except software.
Wall Street had hoped for quicker signs of progress on Whitman's turnaround plan, which centres on transforming the former industry powerhouse into what is being called an enterprise computing corporation.
But Whitman, who took the helm of the San Francisco-based HP just over a year ago, told investors at an annual HP presentation that the company's recovery will start to become visible only in fiscal 2014, when investments begin to pay off.
She blamed unprecedented executive turnover in past years for dragging out the Silicon Valley company's turnaround.
HP gave a particularly gloomy outlook for enterprise services, which provides services to corporations and is one of the company's the largest divisions and a key component of Whitman's rescue plan.
Revenue from enterprise services are expected to go south 11 to 13% in fiscal 2013 and be barely profitable, with operating margins of 0 to 3%, HP said.
Whitman, who became HP's third CEO in as many years, succeding the abruptly dismissed Leo Apotheker just over one year ago, is trying to revitalize the former industry icon via layoffs, cost cutting, and expansion into areas with longer-term potential such as enterprise computing services.
The company has lost almost two-thirds its value since 2010, squeezed by crumbling demand for personal computers in a mobile era and significant leadership turbulence. Its market value now stands just over $30 billion U.S.
HP has been through years of turbulence. Apotheker's 11-month tenure was marked by an acceleration of departures from various divisions, such as networking chief Marius Haas, as he brought in former coworkers from SAP AG.
HP's stock was down at Wednesday's close by $2.22, or 13%, at $14.91 U.S.
