Whitman said the turnaround remained on track and her raised target
reflected how HP continued to find areas to streamline across its
broad portfolio, which encompasses computing, networking, storage
and software. But some analysts wondered whether it signaled a
worsening outlook for the coming year, or if more jobs may be cut.
"The rationale makes sense," said RBC analyst Amit Daryanani. But
"you do worry if there's a finality to this process, or if it's an
ongoing thing that may affect morale at the end of the day. So far
the trend has been worrisome."
HP, whose sprawling global operations employ more than 250,000,
estimated about three years ago when it first hatched its sweeping
overhaul that it would need to shed 27,000 jobs. That number rose to
34,000 last year.
On Thursday, it estimated another 11,000 to 16,000 more jobs needed
to go, scattered across different countries and business areas. That
took the grand total under Whitman's restructuring to 50,000.
The Silicon Valley company is trying to reduce its reliance on PCs
and move toward computing equipment and networking gear for
enterprises, part of Whitman's effort to curtail revenue declines
and return the world's No. 1 PC maker to growth.
But that goal remains elusive. The company posted a disappointing 1
percent drop in quarterly revenue, as it struggled to maintain its
grip on the shrinking personal computer market and weak corporate
That marked its 11th consecutive quarterly sales decline.
Shares in HP closed down 2.3 percent at $31.78, after the company
inadvertently posted the results on its website more than half an
hour before the closing bell.
A PIVOTAL DIVISION
Research jobs, which are vital for innovation and long-term growth,
will continue to grow, Whitman stressed.
[to top of second column]
HP is looking to cut back more in "areas not central to
customer-facing and innovation agendas," she said in an interview,
rather than areas like research. "That's not what we're doing here.
You need to look at the R&D spending, which is up."
HP recorded sales of $27.3 billion in its fiscal second quarter
ended April 30, just shy of the $27.41 billion Wall Street had
Whitman said China remained a challenging region, though revenue
from that country rose in the quarter. U.S. companies like
International Business Machines Corp and Cisco Systems Inc have
blamed recent lackluster performances on a backlash against American
companies in China, in the wake of U.S. spying allegations.
On Thursday, HP forecast full-year earnings of $3.63 to $3.75 a
share, compared with Wall Street's estimate for $3.71.
It reported non-GAAP diluted net earnings of 88 cents a share in the
second quarter, up 1 percent from a year earlier and about level
with what analysts, on average, had expected.
(Reporting by Edwin Chan; Editing by Steve Orlofsky and Richard
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