Hurd Says HP Growth In 2010 Will Outpace The IT Market

"We think we have the best portfolio of technologies and services in the industry," said CEO Mark Hurd, speaking at a securities analyst meeting Thursday. "We're pretty well-positioned to go out in the marketplace and win. I think HP's best days are ahead of it, not behind it."

"Our current view is that the IT market returns to growth in fiscal 2010. And given the strength of our portfolio and ongoing investments in market coverage, we do expect to grow faster than the market," said CFO Cathie Lesjak.

HP is in the midst of its fourth fiscal quarter that ends Oct. 31. For the third quarter ended July 31, the company reported a 2 percent decline in sales to $27.5 billion and a 19 percent drop in earnings to $1.6 billion.

But the focus of the analyst meeting was fiscal 2010. Hurd said HP's addressable market, including PCs, servers, storage, printers, networking, software and services, is $1.3 trillion.

Hurd said he expects sales growth in the IT market to resume in 2010, then added: "We will grow faster than the IT market."

HP predicts that its sales in fiscal 2010 will reach $117 billion to $118 billion, up 3 to 4 percent over fiscal 2009, Lesjak told analysts. Earnings will be between $3.60 and $3.70 per share.

The CFO said HP is forecasting that sales from its personal systems group will grow between 3 and 5 percent in fiscal 2010, but sales from its imaging and printing group will be flat by up to 2 percent.

Enterprise systems and storage technology sales will grow between 2 and 4 percent in fiscal 2010, as will HP services. HP software sales will grow between 7 and 9 percent.

Hurd said HP's cost structure is "much improved from several years ago," but later added: "We don't quite have HP operating as effectively as we can." He said there is still "material opportunity for us" to improve the company's operating efficiencies.

One place HP is still cutting costs is in its EDS services unit, which it renamed HP Enterprise Services this week. So far this year, HP has cut $900 million in operating costs out of the operation through the company's integration efforts, Lesjak said, with plans to cut another $1.2 billion through 2010.