Whitman: New H-P will aim to be ‘two big Fortune 50 companies’
Meg Whitman is splitting up Hewlett-Packard, but she promised analysts Monday that the two tech companies will strive to be “two big Fortune 50 companies.”
If the companies were to remain as large as they are today, they would make the cut. Hewlett-Packard Enterprise, the business Whitman intends to lead, generates about $58.4 billion in revenue while HP Inc. — the business that would focus on sales of personal computers and printing — had $57.2 billion in revenue. Those figures would put both firms, when split, among the top 50 largest Fortune 50 companies. UPS (UPS) ranked 50th on the latest list with $55.4 billion in revenue.
But the new H-P firms will need to grow to keep up with some of America’s largest firms. Whitman, named CEO and president of H-P (HPQ) a little more than three years ago, has sought to turn the company around by slashing thousands of jobs and investing in both of the company’s businesses. But the combined H-P’s total revenue for the first nine months of the fiscal year totaled $83.05 billion, down slightly from a year ago and signaling just how hard it can be to turn around a company as large as H-P in the fast-moving technology sector.
Whitman, speaking to analysts during a conference call Monday, said a separation was possible today because of the innovation H-P has invested in, and the new leadership team that has been put in place the past few years.
“Three years ago, this company was in a fairly difficult position and we needed to rebuild and we needed to do that as one H-P,” Whitman said. Previously a CEO of eBay (EBAY) for ten years, Whitman was named CEO of H-P in 2011 after her predecessor Leo Apotheker was ousted after a tumultuous 11 months on the job.
“Being nimble is the only path to winning,” Whitman told analysts, explaining the rationale behind the split. She said it was important for the businesses to separate to succeed in a “rapidly changing marketplace.”
Already, Whitman is signaling that the business she intends to lead — known as Hewlett-Packard Enterprise — is open to acquisitions. That business focuses on servers, storage, networking and software, and Whitman said each of those businesses are well integrated with each other. But Whitman declined to provide specifics about just how large those potential acquisitions could be when she was asked about it during a conference call.
On Monday evening Fortune’s Pattie Sellers will interview Hewlett-Packard’s Whitman at the 2014 Fortune Most Powerful Women Summit held in Laguna Niguel, Calif.