Whitman Will Stick to Apotheker’s HP Strategies

Hewlett-Packard Co. (HPQ) Chief Executive Officer Meg Whitman plans to stick by strategies set in motion by her predecessor, Leo Apotheker, betting that investors prefer steady leadership to another unsettling change of course.

Whitman, in her first interview as Hewlett-Packard’s CEO, said the company stands by plans to acquire U.K. software marker Autonomy Corp. for $10.3 billion. The company also will continue to explore whether to sell or spin off the personal-computer division, she said. Those moves were announced on Aug. 18.
“It does not signal a change in the strategy,” Whitman said yesterday of her appointment. “We are behind the actions that were taken on Aug. 18. We are firmly committed to Autonomy.”
Whitman is hewing to those plans to avoid alienating shareholders who were fed up with the about-faces that characterized Apotheker’s reign. Still, Hewlett-Packard is overpaying for Autonomy and it shouldn’t have announced a possible PC unit sale without a concrete plan in place, said Chris Whitmore, an analyst at Deutsche Bank AG.

“We’re going to get more of the same from a Meg Whitman- led HP as we did from a Leo-led HP,” said Whitmore, who is based in San Francisco and has a “sell” rating on Hewlett- Packard. “The board isn’t going to change the strategy and is going to continue down this path, which frankly was the fear.”

Apotheker, CEO for less than 11 months, was ousted yesterday after cutting sales forecasts three times and making strategy shifts that blindsided investors. Palo Alto, California-based Hewlett-Packard also said Chairman Ray Lane will become executive chairman.

‘Heavily Scrutinized’

Whitman’s challenge will be boosting revenue while assuaging the investors whose dismay fueled a 47 percent plunge in Hewlett-Packard stock under Apotheker. She said the company will decide the outcome of the PC business as soon as possible.
“We’ll make a decision as fast as we possibly can,” she said in the interview. “We understand uncertainty doesn’t help the business, doesn’t help customers, doesn’t help shareholders.”

Her experience at consumer-oriented companies such as EBay Inc. (EBAY), Procter & Gamble Co. (PG) and Hasbro Inc. (HAS) may leave her ill- equipped to run Hewlett-Packard’s business-computing divisions, said Shaw Wu, an analyst at Sterne, Agee & Leach Inc. in San Francisco.

“She’s going to be heavily scrutinized,” said Wu, who has a “neutral” rating on the shares. “She doesn’t have the background to turn around HP.”