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HP CEO expects growth in coming years after steady 2014

Hewlett Packard’s CEO expects to see stable revenue in 2014 and is expectant that business will improve in the coming years with as much as $3 billion [£1.8 billion] set aside for research and development.

Meg Whitman told an investor call the company expects “total revenue to stabilise and start driving new pockets of growth” in 2014 before seeing business pick up in 2015 and 2016.

"Fiscal 2014 will be a pivotal year," she told analysts gathered in San Jose, according to Reuters. "In fiscal 2015, you can still expect to see acceleration, and in fiscal 2016, an industry-leading company."

HP expects to generate free cash flow of between $6 billion [£3.7 billion] and $6.5 billion [£4 billion] in 2014 with almost half of it earmarked for shareholders through dividends and share buybacks.

Whitman is two years into a five-year plan that is supposed to turn around the company’s fortunes and as far as the plans go, the co-CEO is happy with how everything is going.

"This time last year I was feeling HP was falling dangerously behind. Our business units lacked a clear, crisp integrated strategy. Our innovation pipeline was there but wasn't being commercialized. In 2013 we started to change that. Our multiyear journey continues. I am comfortable with the progress we are making,” Whitman added.

Whitman explained that to achieve this the company is moving away from its traditional sectors to focus on those that are growing such as storage, networking and providing other services to large corporations

Analysts were certainly on-board with the positivity of Whitman’s comments, with Patrick Moorhead, analyst at Moor Insights & Strategy, particularly happy with the strengthening of the services and software departments he labelled the “problem children last year”.

"Most of the comments were about growth opportunities rather than fixing holes in the ship. Investors like that,” Moorhead said.

The market reacted strongly to the comments made by Whitman with shares up by 8.6 per cent to around $22.53 [£14.14] by mid-afternoon and making up for the big drop seen in August when 20 per cent was wiped from the stock’s value.