Hewlett-Packard's profit plummets 91 percent, beating analysts' expectations

Amid burgeoning competition and dwindling market share, Hewlett-Packard (HP) hired chief executive Meg Whitman to turn around the company's moribund earnings and ignite growth. The company reported its fourth quarter earnings and yearly financial results this week, underscoring the obstacles Whitman must overcome in her quest to drive the company toward profitability.

Palo Alto, California-based HP said on Monday net revenue in its fourth fiscal quarter hit $32.1 billion, representing a 3 percent decline from the same period the year prior. For the year, HP logged revenue of $127.2 billion, which was a scant 1 percent higher than the $126 billion in revenue recorded in 2010

HP's net income tanked in its latest fiscal quarter, as profits dropped to only $200 million - 91 percent lower than the same period in 2010. For the 2011 fiscal year, HP's profits fell 19 percent to $7.1 billion.

The lackluster revenue and net income figures were expected, with analysts largely forecasting the company would report lower earnings as it carries out an ambitious business cost reduction program and works to gain back market share lost to rivals including Apple. Analysts were pleasantly surprised with the firm's net income, illustrating how far the company must climb in its push to increase profitability.

The New York Times reports Whitman endeavored to remain positive when she delivered the technology giant's earnings report to investors this week. Whitman, who successfully guided EBay from a fledgling startup to an international powerhouse, has focused her creative and managerial faculties on HP's internal development.

Whitman hopes to drive future earnings and more effectively compete with rivals by reworking HP's businesses, which include its personal computing, servers, printers and data management divisions. Whitman asserted she would buck with her predecessors – including her immediate forerunner Leo Apotheker - by pursuing growth from within. Under Apotheker, HP acquired Britain-based Autonomy for $11.7 billion in a move that investors and analysts largely derided.

"HP has a great opportunity to build on our strong hardware, software, and services franchises with leading market positions, customer relationships, and intellectual property," she said in a statement. "We need to get back to the business fundamentals in fiscal 2012, including making prudent investments in the business and driving more consistent execution."

HP is the world's biggest technology company by revenue, but it has struggled as the economy soured and business costs soared. Whitman said in an interview that the company would grow in 2012, but she cautioned that its expansion would mimic that of U.S. gross domestic product (G.D.P.).

"We will grow at G.D.P.-type growth rates, maybe faster," Whitman said.

Nevertheless, Whitman allayed investor concerns, affirming the company planned to drastically augment profits through improved internal operations. Moreover, though revenue declined in HP's usually profitable printing division in the fourth quarter, Whitman contended it was not prompted by customers shifting their business elsewhere, but rather, by weak economic conditions and poor management.

Still, HP faces an uphill battle as it works to reignite earnings and growth. The company faces a myriad of challengers in nearly all of its core business units, including its personal computing sector. On Monday, analysts from the research firm Canalys further sparked worries, projecting Apple to surpass HP in 2012 as the world's biggest seller of personal computers.

Nonetheless, though the Silicon Valley powerhouse is down, many analysts are warning investors not to count it out – especially with Whitman at the helm.