Meg Whitman: HP's Surprise Turnaround Star
NEW YORK ( TheStreet) -- There were plenty of naysayers when Meg Whitman took the reins of seriously troubled HP(HPQ) last year but the former eBay(EBAY) chief is now quietly answering her critics by making decisive moves aimed at getting the tech giant back on track.
HP shares climbed more than 3% to $21.78 on Thursday as investors responded to the firm's strong second-quarter results , released late on Wednesday. The no. 1 PC maker successfully side-stepped the weakness cited by rivals Dell(DELL) and Cisco(CSCO) , casting Whitman in a positive light.
|HP CEO Meg Whitman is HP's unlikely turnaround star.|
Already a Silicon Valley star thanks to her time at eBay, there were nonetheless some raised eyebrows when Whitman was chosen to replace ousted HP CEO Leo Apotheker in September. In particular, critics questioned Whitman's credentials for leading a company of HP's vast size and complexity, citing her lack of enterprise IT and supply chain expertise.
Since then, however, Whitman has proved her leadership skills as HP begins to distance itself from the brief but turbulent Apotheker era. Crucially, the new CEO quickly nixed Apotheker's contentious plan for a possible PC spinoff, and also won plaudits for HP's support ARM's(ARMH) low-power chips.
Whereas her predecessor left investors scratching their heads about HP's strategic direction, Whitman has cut a decisive figure. Last year, for example, the CEO opted to open source the acclaimed webOS operating system, seen as a shrewd bid to resurrect webOS technology. More recently, she took the bold move of merging the company's PC and printer divisions in an attempt to combat falling hardware sales.
Whitman is also willing to make tough personnel decisions, as evidenced by this week's announcement that the Dow component is cutting 27,000 jobs, 8% of its total workforce.
"We're introducing a lot of change, which is absolutely necessary to turn HP round," she explained, during a CNBC interview on Thursday. "We have a clear, focused strategy for the company, we have a clear, focused strategy for each of our operating groups."
Key areas of focus include the company's HP's under-performing printer business and the Autonomy software acquisition, which needs to scale up, according to the CEO.
Whitman, who can often be seen eating lunch amongst employees at the cafeteria in HP's HQ, has also performed well during public appearances. On TV, in particular, the HP leader has come across as composed and totally in control of the company's revamp.
Analysts, however, warn that, like Rome, the new HP won't be built in a day.
"Whitman appears to be taking the appropriate actions, in our view, but we don't expect to see a fundamental inflection point in the near term," explained Jayson Noland, an analyst at Robert W. Baird, in a note released on Thursday. "Whitman named cloud, big data and security as areas of strategic investment -- we see these areas as offering attractive growth, but execution matters given the level of competition."