Whitman pledges to turn around HP 'by 2016' as shares plummet to nine-year low

CEO merry-go-round is to blame for revenue slump, says Whitman

HP's shares have plummeted to a nine-year low after its CEO Meg Whitman stated that revenue for 2013 would decline and that it would take five years to revive the firm financially.

Whitman - the third HP CEO in as many years - told analysts that the senior executive turnover is to blame for the revenue slump.

"My belief is that the single biggest challenge facing HP has been changes in CEOs and executive leadership, which has caused multiple inconsistent strategic choices and frankly some significant executional miscues," she said.

The company forecasts overall earnings at between $3.40 and $3.60 a share in fiscal year 2013, below the average expected by Wall Street of $4.18, according to Thomson Reuters. The pessimistic forecast caused HP shares to crash by 13 per cent - the biggest single-day drop since August 2011.

The firm said that it would recover financially by 2014, when it aims to deliver on its savings targets and complete its restructuring programme. By 2016, Whitman expects the company's operating profit to grow faster than revenues.

The CEO has tried to implement changes to HP's strategy since her arrival a year ago, axing her predecessor Leo Apotheker's idea to spin off the firm's PC division. She also led a restructuring programme with plans to shed 29,000 jobs by 2014 - more than eight per cent of its global workforce. Under her direction, HP is attempting to shift away from its focus on printers and PCs to become an enterprise computing company, similar to IBM.

This makes HP's forecast for its enterprise services arm particularly bad viewing for Whitman: revenue is expected to decline by 11 to 13 per cent in fiscal 2013.

The ailing firm has had a gloomy 2012 so far: in August, HP revealed a colossal quarterly loss in its third fiscal quarter after writing down $8bn (£5.1bn) on its services arm, largely as a result of its poorly timed $13.9bn (£8.8bn) purchase of IT equipment and services provider EDS in 2008.

In May, after the announcement of the job cuts, union Unite's national officer Kevin O'Gallagher described the potential loss of 1,600 UK jobs as a "devastating blow to the technology industry in the UK".