HP Split Doesn’t Help Fiscal Q4 2014 Sales but Earnings Stay in Line
One month ago, Hewlett-Packard disclosed plans to separate into two publicly-held companies, one focused on PCs and printers and another on enterprise business. In the ensuing period, the vendor has appointed a top line management team to oversee the breakup along with a crew of 450 people to ease the transition.
One month ago, Hewlett-Packard (HPQ) disclosed plans to separate into two publicly-held companies, one focused on PCs and printers and another on enterprise business. In the ensuing period, the vendor has appointed a top line management team to oversee the breakup along with a crew of 450 people to ease the transition.
The breakup plan apparently didn’t do anything to spark the vendor’s sales, however, as HP reported $28.4 billion in sales for the period, a 2 percent year-over-year slide and below Wall Street’s expectations of $28.8 billion. For the fiscal year, HP recorded $111.5 billion in sales, down 1 percent from last year’s totals, and slightly under analysts’ expectations.
HP’s net income for the quarter slid 6 percent to $1.3 billion while net earnings per share fell 4 percent to $0.70 a share.
Much of HP’s quarterly performance was in line with guidance, giving chief executive Meg Whitman the opportunity to paint the rosiest picture possible.
“I’m excited to say that HP’s turnaround continues on track,” said Whitman. “In FY14, we stabilized our revenue trajectory, strengthened our operations, showed strong financial discipline, and once again made innovation the cornerstone of our company,” she said.
“Our product roadmaps are the best they’ve been in years and our partners and customers believe in us,” Whitman said. “There’s still a lot left to do, but our efforts to date, combined with the separation we announced in October, sets the stage for accelerated progress in FY15 and beyond.”
By segment, HP year-over-year results, down in every unit but PCs, networking and software license revenue:
- PC revenue up 4 percent year-over-year: Desktops units down 2 percent and Notebooks up 8 percent
- Printers down 5 percent
- Enterprise Group revenue down 4 percent: Industry Standard Servers down 2 percent, storage down 8 percent, Business Critical systems down 29 percent, networking up 2 percent, technology services down 3 percent
- Enterprise Services revenue down 7 percent: Application and Business Services revenue down 6 percent, Infrastructure Technology Outsourcing revenue down 7 percent
- Software revenue down 1 percent: License revenue up 2 percent, support revenue down 1 percent, professional services revenue down 5 percent, SaaS revenue flat
- Financial Services revenue down 1 percent