Mark Hurd, chief executive of Hewlett-Packard, on Tuesday outlined a three-pronged strategy for expanding the world’s second biggest computer maker by capitalising on growing demand for digital printing, mobile computing, and software and equipment for a new generation of corporate data systems.
“[These trends] play to our strengths . . . and we are going to take advantage of them,” said Mr Hurd, who has been charged with turning round HP after several years of inconsistent results and stock market underperformance.
Speaking at his first analyst meeting since he replaced Carly Fiorina as chief executive this year, Mr Hurd said HP expected revenue growth of 4-6 per cent for the year ending in October 2007.
For the current year, Bob Wayman, chief financial officer, said the company expected earnings of $1.88-$1.95 a share, excluding special charges and the cost of expensing stock options, on revenues of $89.5bn to $91bn.
HP also announced an expansion into the European imaging and printing market with the acquisition of bilderservice.de, the German owner of Pixaco, an online photo printing service.
The deal, for an undisclosed sum, comes on the heels of HP’s purchase of Snapfish, a US-based online photo service with 20m registered customers.
It represents the latest in a series of moves intended to transform HP’s imaging and printing business, best known for its desktop printers, into a key driver of growth by expanding into the market for commercial-scale printing, digital photos and copying as well as other high-end imaging services.
HP will also try to take advantage of a shift towards decentralised, low-cost corporate IT systems, or “data centre architectures”, which are less labour-intensive but require more sophisticated management software than traditional mainframe computers.
Mr Hurd said HP would focus on providing mobile computing services that allow customers to access data securely wherever they want.
Mr Hurd did not announce any new restructuring in addition to a $1.9bn “catch-up action” unveiled in July, which has seen HP shed about 15,300 jobs and restructure its salesforce and IT systems.
“I am not working on spinning off the PC business, the printing business or the ... server business,” he said. “In the end, I believe there are leverage points that exist across the company that are of value.”
However, he indicated the company would keep watching costs as it attempted to adapt to a trend towards lower operating margins in the computer industry.
Shares in HP, among the best performers on the Dow this year, closed down 3 per cent to $29.07 in New York on Tuesday.