Hewlett-Packard (HP) has warned that its fiscal fourth quarter revenues would be lower than anticipated blaming the recent earthquake in Taiwan, plus its under performing US sales force.
Speaking for the first time to the financial analysts community since her appointment as HP chief executive in July, Carly Fiorina blasted the "under performance" of the company's north American sales organisation, and admitted that it "is a long standing problem".
She has also rejigged the responsibilities of her lieutenants which include Ann Livermore, president of the company enterprise computing unit, who had been expected to succeed former chief executive, Lew Platt.
Fiorina said revenues in the quarter, which ends in October, will be at the "low end" of the 10 to 13 per cent range the company had been expecting. Analysts polled by First Call had been anticipating earnings per share of $0.99.
She said: "Until very recently we remained comfortable [with HP's estimates]. But we also had been counting on the very strong performance in several product lines - but especially in PCs - to offset the weakness in the US field. With the Taiwan disruption… we don't think we'll achieve the high end of that range."
Fiorina also warned that earnings from continuing operations will also be impacted by charges related to the company's split from its test and measurement business, now called Agilent Technologies.
On 1 November HP will introduce a new incentive based compensation scheme in a bid to revitalise its sales organisation. "Poor performers have been removed," said Fiorina, adding that Livermore will manage HP's top 100 accounts.
"Unknown remains, of course, but despite weak revenue, we are still striving to meet expectations for earnings this quarter, and we have a decent shot at it," she concluded.
On the positives, Fiorina pointed to the printer business which will enjoy a "mid teens" revenues growth, while its new Pavilion branded notebooks will move into the retail channel for the first time next week.
In addition to her responsibility for leading HP's new found aggression into the Internet market, Livermore will manage the company's professional and financial services activities. Antonio Perez will head up HP's digital imaging business as well as be responsible for all consumer sales and support. He has also been charged with rejuvenating the HP brand.
HP has also pulled together its server and storage products under the leadership of Duane Zitzner, while Carolyn Ticknor will be in charge of the company's printing and imaging technologies.
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