HP CEO targets lofty goals

NEW YORK: Mark Hurd, Hewlett-Packard Co.'s chief executive, has spruced up the company's bottom line and share price, but the computer and printer maker has plenty of challenges ahead before the company can achieve its financial goals, according to the latest edition of Barron's.

Hurd, who succeeded the controversial Carly Fiorina more than a year ago, has said he expects the company to grow annual revenue by 4 percent to 6 percent and operating margins by 13 percent to 15 percent over the next three years, Barron's said.

Bear Stearns computer hardware analyst Andy Neff says he expects the company to earn $2.40 per share in 2007, the highest Wall Street estimate, and its stock to sell for $45 per share, Barron's said.

HP stock closed at $32.62 on Thursday, the last day of trading before the Good Friday holiday.

The company is now divided into six revenue buckets, with imaging and printing accounting for about 29 percent of revenue but 57 percent of total operating profits, Barron's said. Personal systems, such as notebooks and mobile devices, account for 30 percent of revenue and 11 percent of profit.

Enterprise computing accounts for 19 percent of revenue and 13 percent of operating profit. Services account for 18 percent of revenue and 19 percent of profit. Financial services account for 2 percent of revenue and 4 percent of profit, while software accounts for 1 percent of revenue and losses.

Services and printing are the only groups whose operating profits have not been trending up over the past three years, Barron's said, and fixing the unbalanced performance may be a key to fixing the company.