HP stock sinks with slow turnaround

An analyst day at the company's headquarters in Northern California opened with HP boss Meg Whitman laying out her vision for reviving HP and projecting earnings for the year that fell far short of previous expectations.

HP shares plunged 12.96 percent to end at $14.91 on the New York Stock Exchange, the lowest since November 2002.

"HP has a powerful set of assets, a culture of engineering innovation and a trusted brand," Whitman said in a release.

"Now, we have to focus on bringing our incredible assets together to deliver for our customers, employees and shareholders."

Whitman told analysts that HP made progress during the past year stabilizing the business, which has been thrown off balance by changes in leadership, and that a foundation was laid for a "multiyear turnaround."

HP said its focus includes capitalizing on trends in data security and shifting computing into the Internet "cloud."

HP is on track to complete its restructuring by the end of 2014 and its revenue would be growing in line with the US gross domestic product by 2016, according to Whitman.

HP anticipated revenue for fiscal 2013 would decline during what Whitman referred to as a "fix and build year."

The company said its profit for the fiscal year would be between $3.40 and $3.60 per share, far below analyst expectations of $4.18 a share.

The market reaction was brutal and Brian White of Topeka Capital markets called the new outlook a "bomb" from the world's biggest PC maker.

"Given this weak outlook, the stock is selling off, but we believe there remains more downside potential," White said, pointing out that HP's key segment in PCs and printers faces "negative secular trends."

Despite Whitman's turnaround efforts, Amit Daryanani at RBC Capital Markers said that "in the near-term, things will get more challenging before they get better."

HP announced last month that its job cuts under a major restructuring program will total some 29,000, or 2,000 more than previously estimated.

In a regulatory filing, HP said the cuts will be made through its 2014 fiscal year.

The cuts are part of an effort by Whitman, who took the reins at HP a year ago, to turn around a giant company hurt by a shift away from traditional PCs.

HP on Monday took aim at "post PC" workplaces with a business-oriented tablet computer powered with new Windows 8 software by Microsoft.

The ElitePad 900 was to be available in the United States in January, with pricing details revealed closer to its release date.