tampabay.com

More cuts loom at HP

By ASSOCIATED PRESS
Published December 13, 2006


Computermaker Hewlett-Packard Co. still has more cost-cutting ahead, even after a giant restructuring that has sliced the work force by 10 percent, chief executive Mark Hurd told analysts Tuesday.

At a meeting in New York that was broadcast over the Internet, Hurd said HP would continue to look for expense reductions while it retools its sales strategies and makes other moves aimed at improving the company's position.

"We have a lot more cost to take out," Hurd said. "We are a company that is transforming - we are not a company that is transformed."

Hurd already is credited with sparking a dramatic turnaround at HP in less than two years at the helm; HP's stock price has doubled. Starting in July 2005, HP has cut 15,300 jobs and overhauled its retirement plan, moves aimed at saving $1.9-billion a year.

But Hurd said those steps alone have not made the company as efficient as it could be.

"I wish it were that easy," he said. "We have more work to do."

Hurd appeared to indirectly dismiss talk that HP might buy network security provider Symantec Corp. He said that after HP's $4.5-billion acquisition of softwaremaker Mercury Interactive Corp. this year, the company would likely engage only in "targeted" mergers and acquisitions. "You should not be expecting us to do huge transactions," he said.

HP chief financial officer Robert Wayman, who announced retirement plans Monday, reiterated the company's prior earnings and revenue guidance for fiscal 2007, which ends Oct. 31.

He also released the company's first public forecast for 2008, saying revenue would likely grow 4 percent to 6 percent, to somewhere between $101-billion and $103-billion. Earnings per share should be between $2.78 and $2.98. Wayman said that implied no big swings in international currencies and only modest acquisitions.