HP has announced a significant drop to its profits in the fourth quarter, with its PC business beginning to feel the force of bumbling indecisions from its senior staff.
Net income fell a massive 91 percent to $239 million, down from $2.5 billion at the same point last year as the firm splashed out big cash on the acquisition of software firm Autonomy. Overall revenues were also down from $33.3 billion at the same point last year to $32.1 billion, according to figures released by the company, or a drop of three percent, .
The results follow a tumultuous few months for cash-strapped HP, which sent its shares nose diving following a half-cooked plan to sell off its PC business which was sunsequently knocked on the head. Revenues for its PC unit were down in the fourth quarter, dropping two percent to $10.1 billion.
The full effects of the dithering over its PC unit will not be felt until subsequent quarters, said CEO Meg Whitman. According to the Wall Street Journal she indicated in an interview that sales were only now beginning to be realised in the current quarter.
Whitman has been attempting to steady the ship, but it seems there are expectations within HP that there is much to be done to get the firm back on track. Chief Financial Officer Cathie Lesjak talked of a “cautious” outlook for the firm, with wider economic uncertainties also contributing.
Flooding in Thailand is also expected to tighten the screws on HP, with shortages of hard drives set to hurt the hardware businesses. Lesjak indicated that price rises were likely going into 2012, with hard drives finding their way to higher end products.
Despite the doom and gloom of HP’s road to recovery, it seems that its PR team have concocted a cunning plan to divert attention to its printer business. A press release states that HP is at the top of three of Gartner’s ‘Magic Quadrants’ for its printers and print services.
HP was apparently commended on its “completeness of vision” as well as its “ability to execute”, which are perhaps not totally applicable to some off decisions made by Apotheker before he was shown the door.
Whether this will be enough to placate investors is another thing, of course.