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Saturday, May 25, 2013

Whitman Says H.P. Is ‘Not Mortgaging the Future\'

5:06 p.m. | Updated Coming off a quarterly earnings report that pleased investors even as revenues fell, Hewlett-Packard's chief executive, Meg Whitman, declared Thursday that “we feel good about where we are.”

In an interview with David Faber and Jim Cramer of CNBC, Ms. Whitman was asked whether the company had a strategy of “shrinking to profitability,” given its continuing decline in revenues. “We are investing a lot in our business,” she said. “We are not mortgaging the future.”

“We are embarked on a five-year turnaround journey, we're about 18 months into that journey, and I think we're right where we thought we would be, in fact probably a little ahead of schedule,” said Ms. Whitman, the longtime eBay chief who took over at H.P. 21 months ago.

As Quentin Hardy reported in The New York Times on Thursday, analysts are far from certain that H.P. can make the transition from its traditional businesses to a field increasingly dominated by cloud computing and mobile devices. And Ms. Whitman acknowledged the challenge.

“We are growing businesses that power the new style of I.T.; we've got declining businesses that powered the old style of I.T.,” she told CNBC. “So we're in that knothole that one has to get through.”

In the most recent quarter, the company's net income fell 32 percent, and revenue was down 10 percent. But its earnings per share exceeded expectations, and H.P.'s stock gained 17 percent in Thursday's trading.

While the company does not expect growth this year, Ms. Whitman said, “we do believe growth is possible in 2014, probably not in every business, but we hope over all.”

She said that printing was a bright spot, asserting that H.P. was “innovating around the business model,” including offering higher-cost printers but lower-cost ink in developing countries, and developing a subscription model for ink in the United States market.

And she reaffirmed that H.P. was not considering spinning off any of its businesses, a move considered under her predecessor, Léo Apotheker. “We believe that keeping H.P. together is the right thing to do,” she said.