HP says the company is making good progress, and is over making drastic cost cuts. “While there is a lot more work to be done, I am confident about the progress we are making,” said CEO Meg Whitman. 

HP – 2014 Outlook

Cathie Lesjak, HP’s executive vice president and chief financial officer, says there will be ‘pockets of growth’ helping to offset continuing challenges in the macro environment and weak public sector spending. HP expects the year-over-year revenue decline in fiscal 2014 will moderate from fiscal 2013.

HP anticipates operating profit dollars to be flat to up year-over-year in fiscal 2014. Earnings per share or EPS is estimated to be in the range of $2.85 to $3.05.

HP expects to generate approximately $9 billion to $9.5 billion in cash flow from operations in fiscal 2014. The company is expecting to return at least 50 per cent of free cash flow to shareholders through dividends and share repurchases.

HP says it will invest in its product portfolio to accelerate high-growth areas in the ‘New Style of IT’. HP plans to reinvest approximately 12 cents per share of savings from its restructuring program into the business in fiscal 2014, including products and solutions such as 3PAR, networking, Vertica and cloud solutions.

HP – 2013 milestones 

HP says the past year was a ‘fix and rebuild’ year, where the company reduced operating net debt by almost $8 billion, approaching a goal of zero. R&D spending is expected to be in excess of $3 billion in fiscal 2013.

HP – New Style of IT

The core of its strategy is now focused on providing technology solutions for the ‘New Style of IT’, says HP, which includes cloud, security, big data and mobility.

HP – Business segment strategies

HP also unveiled a snapshot of the company’s multiple business segments.

• Printing and Personal Systems (PPS): Personal Systems continues to see traction in commercial, where it outgrew the market in the most recent calendar quarter over the same period last year, says HP.  In fiscal 2014, PPS’ priorities include growth through greater segmentation, product innovation and a focus on mobility, cloud and security.
• Enterprise Group (EG): More than 1,900 enterprise customers have turned to HP for their hybrid cloud solution in the past year, representing approximately 60% year-over-year customer growth.   
• Enterprise Services (ES): Key priorities for ES in fiscal 2014 include a focus on the buildup of advisory and transformation offerings, service delivery, increasing sales, and ongoing cultural transformation across the organization, says HP. ES revenue is expected to decline 4% to 6% year-over-year in fiscal 2014. Operating margin will be up 3.5% to 4.5%. ES maintains its long-term financial model of 3% to 5% revenue growth, an operating margin rate of 7% to 9% and return on invested capital of 15% to 25%.
• Software: Software will focus on its differentiated strategy and product portfolio as well as continued operational improvements, says HP. 

HP’s shares rose $1.85 to close at $22.60 on the announcements.