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On The Call: HP CEO Meg Whitman

PALO ALTO, Calif. (AP) -- While discussing her efforts to turn around Hewlett-Packard Co. in a Wednesday conference call, CEO Meg Whitman assured analysts she is determined to outmaneuver rivals such as Dell Inc.

"These are highly competitive markets with aggressive competitors fighting for share and we need to fight much harder," Whitman said. "This all comes down to our will to win and we are committed to winning."

At the same time, HP is unwilling to cut its prices as dramatically as Dell has been, according to Cathie Lesjak, HP's chief financial officer.

That prompted one analyst to ask Whitman to elaborate on what she was talking about.

In her response, Whitman took a swipe at Dell, which is hoping to end its 25-year history as a publicly traded company by selling itself to CEO Michael Dell and a group of investors led by Silver Lake Partners. Last week, Dell reported a 79 percent drop in its latest quarterly earnings, raising suspicions among some of its stockholders that the company is deliberately trying to undermine its own results to make Michael Dell's takeover offer of $13.65 per share look more attractive.

QUESTION: I was hoping you could clarify what your strategy for balancing profitability versus share in key competitive segments...Meg, I think I heard you say we are committed to win. Cathy, you said we are going to pursue profitable growth. I'm not quite sure what either of those really means...

ANSWER: It's a balance, right?

You want to gain share every place you can or minimize the share loss. But you have to manage balance with profitability, and it's a balance we focus on, you know, every day and every week. This quarter, you saw one of our big competitors, Dell, completely crater their earnings. And that is not sustainable for a company like Hewlett-Packard. Maybe it's what you do when you are going private, but it is not what you do if you are running a big publicly held company trying to create the financial capacity to invest in innovation, to invest in our future.

And, as I have said, we are here to set this company up for the long term, not just get through this year...We did walk away from deals that were really problematic from an operating margin perspective. Now, what the team understands is that can't be an excuse. That means we have to figure out how to compete....Our gear has to be much better, we have to make sure we've got the right product design for the right market segment...

And we have to make decisions about what deals we must win. And we are going to be focused on the deals that are sticky, as opposed to the deals that are strictly transactional in nature — that you do one and there's no long-term relationship and the next time they go to market they don't care if it's us or someone else. So, that's the balance that we are putting in place.