Mark Hurd might have managed to turn around HP in the short time he has been the President, Chairman and CEO of the technology giant. But he believes that a lot still needs to be done before the champagne bottle can be uncorked.

At a Morgan Stanley Technology Conference in San Francisco recently, Hurd said the company still has to reduce its cost structure in order to be more profitable and grow. This does not mean that the company is making losses, by a long shot. However, the overheads were eating into its profits, which is why Hurd embarked on trimming the costs. “On an absolute basis, we're not doing well,” he said.

Mark Hurd: Profits were strong, but challenges are still out there

HP has been on a two-year campaign to cut costs, which also resulted in laying off people. But this has not resulted in any dramatic impact on the company's profit and loss statement, Hurd said.

“I don't think that we've got very good traction with the investment base understanding that these are efforts that require time,” Hurd said. “It will take us all of the next two years to be able to take advantage of that.”

Talking to several Morgan Stanley investors present at the event, Hurd said the total available worldwide market for computers, servers, printers and information technology services HP offers, is $1.2 trillion, but added that it still doesn't cover that market effectively. He said that the company needs to add to its sales force and develop more partnerships with other companies to better reach customers.

By many measures, HP is successful. It edged past rival IBM in 2006 revenue, $91.7 billion to IBM's $91.42 billion, improved its net income by 158 percent over 2005 to $6.2 billion, and is the industry leader in personal computer and blade server sales.

Page(s)   1