Hewlett-Packard shares take a dive

Shares of Hewlett-Packard swiftly tumbled yesterday after chief executive Megan Whitman identified 2013 as "a year to fix and build".

She told investors, "The single biggest challenge facing Hewlett-Packard has been changes in CEOs and executive leadership, which has caused multiple inconsistent strategic choices, and frankly some significant executional miscues. It is going to take longer to right this ship than any of us would like."

As a result, shares fell 13 per cent in New York to $14.91 – HP's biggest fall in a single day since August 2011 and a 10-year low.

According to Whitman, 2014 will be the year when signs of revival will be evident, after investments start paying off. By 2016, the growth of the company's revenues should be consistent with US GDP.

The company also stated its profits for the financial year would be between $3.40 and $3.60 per share, well short of analysts' $4.18 predictions.

HP's enterprise division offered no better news for the financial year, forecasting an 11-13 per cent decline in revenue.

Since Whitman assumed control of the company 11 months ago, she has attempted to change its long-term fortunes with employee and spending cuts as well as expansion plans.

Around 27,000 are expected to be laid off by 2014.