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TheStreet Open House

It's Painful to Watch Meg Whitman Fail So Miserably at HP

Stocks in this article: HPQBBRYBBYAAPLJCP

NEW YORK ( TheStreet) -- It was bad enough having Arnold Schwarzenegger as Governor of California. But things likely would have ended up a heck of a lot worse had Meg Whitman defeated Jerry Brown in 2010. If she ran the great state I call home as poorly as she's running Hewlett-Packard (HPQ), we might not be experiencing the better days The New York Times discussed over the weekend.

Whitman's lack of vision at HP is nothing short of pathetic. After another lackluster earnings report, there's no sign Meg Whitman can turn HP around within the century, let alone this decade.

In mid-September 2012, I chided Whitman for saying since everybody else has a smartphone, HP will probably do one as well.

Then, in early October 2012, David Faber, Jim Cramer and Melissa Lee absolutely schooled a hapless Meg Whitman, who dodged legitimate questions such as Why is HP putting so many eggs in the printing basket, given the shift to mobile environments and the cloud?

Around the time of that interview, Cramer referred to what's happening at HP as "jaw dropping."

In mid-November 2012, CNBC gave Whitman another chance, but this time one-on-one with Faber. Again, Faber pressed her on printing and Whitman provided Blackberry (BBRY)-like answers:

... we've got some very interesting products coming up in the consumer space.

During that period, TheStreet's Chris Ciaccia published the aptly-titled HPQ is LOL.

It's all fun and games until the CEO basically tells investors all we're really doing is playing traffic cop with the balance sheet. We've got nothing in terms of innovation and don't expect year-over-year revenue growth.

What's even funnier and gamier is that since mid-September 2012, HPQ stock, not including Wednesday's after hours crash, is up roughly 40%. The situation at HP is every bit like it is at Best Buy (BBY) as it was at the artist formerly known as RIM.

If you can trade the aggressive moves these stocks make, more power to you. On a HPQ- and especially BBY-like run, it's not all that difficult. But don't get greedy. Because these stock price pops do not reflect what's actually going on at the company. And, at HP, that's obviously nothing.

Dig the lackadaisical rhetoric, shallow spin and flat-out disappointment from Whitman and her counterparts on HP's Wednesday afternoon conference call:

In our personal systems business, we are seeing continued PC market contraction as HP revenue declined 11% over the prior year.
However a weak PC market ...
As you know, I stated in May that I believe that company level revenue growth was still possible in fiscal 2014, particularly given the challenges I just highlighted in enterprise group and personal systems as well as the fact that 2013 revenue from key accounts in enterprise services is running off more slowly than anticipated. We now expect that total company year-over-year revenue growth in fiscal 2014 is unlikely.
The PC market has not stabilized as much as I had anticipated it would. That stabilization is yet to occur.

Some turnaround!

So, Meg, what happens if "stabilization" in the PC market never occurs? Quite a few people don't think it will. Because, let's face it, we're not witnessing a decline. We're seeing an out-and-out crash.

In the UK, as CNET notes, PC sales "are at (a) 'make or break point,' after "nearly three years of freefall." It's not much better in North America, where a handful of players, led by Lenovo and HP fight for share in a dying market cannibalized by Apple (AAPL) Mac sales and the growth of tablets. HP offers nothing compelling enough to move the needle in the tablet category.

So, just as much as the Meg Whitman era at HP stinks of Blackberry and Best Buy, it also looks a lot like what's going on at JCPenney (JCP). That company simply uses a former CEO and out-of-favor hedge fund manager as scapegoats. While it can, HP uses the PC market crash, which it deserves considerable responsibility for, to exonerate itself.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

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