This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

HP Can't Stop Worrying About Tomorrow

NEW YORK (TheStreet) -- I'm starting to wonder if the faith that some investors have placed in beleaguered tech giant Hewlett-Packard (HPQ) will ever prove to be anything other than misguided optimism. As harsh as that may sound, it's looking less and less likely with each passing quarter that the promises of tomorrow will ever come.

Little Growth Today, Little Hope for Tomorrow

HP's stock, which has been on a steady decline, losing over 30% of its value since starting the year at $25, is now under further attack. On Wednesday, the company confirmed what investors have feared for quite some time -- things are going to get worse before it gets better.

The company's CEO, Meg Whitman warned that HP's business segments are in a steep decline and investors shouldn't expect much for all of 2013 as revenues are set to fall in every area except software.

Even more concerning was that HP has now admitted that it can no longer leverage its once-dominant enterprise footprint. Revenue from its service business is expected to drop by 11% to 13% for fiscal year 2013. In other words, forget profitability -- particularly with margins expected to possibly go to zero and only as high as 3%.

Whitman then advised it would not be until 2014 when the company would show some semblance of a turnaround as its investments at that point would then begin to payoff. But Wall Street cared very little about waiting that long. As a result, investors punished the stock mercilessly, sending shares down 13% to $14.91 -- levels it had not seen in nine years.

I'm still a believer in Whitman, but this has to come as a disappointment -- even though not much has been expected from the company in terms of growth. Though HP was a mess when she took over, it is tough to dismiss the 35% loss the company's stock has suffered since she took over just a little over a year ago.

A lot of that can be attributed to the mobile device and tablet surge which has affected its PC business. But a great manager knows how to stop the bleeding.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,124.67 +72.94 0.43%
S&P 500 1,984.66 +11.03 0.56%
NASDAQ 4,460.3890 +35.6850 0.81%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs