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NEW YORK ( TheStreet) -- I'm starting to wonder if the faith that some investors have placed in beleaguered tech giant Hewlett-Packard(HPQ - Get Report) 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.