Earnings up for HP’s First Quarter, Commercial and Consumer Printer Shipments Up

On February 20th, Hewlett-Packard reported results for its first quarter, with earnings per share (EPS) of $0.74, up 17 percent from the $0.63 it reported for the period a year ago, and above its previously provided outlook of $0.60 to $0.64. Net earnings for the quarter were $1.4 billion, a 16-percent increase versus the same period a year ago.

First quarter net revenue of $28.2 billion was down 1 percent compared to the same period a year ago.

HP fiscal 2014 first quarter financial performance:

Q1 FY14 Q1 FY13 Y/Y
GAAP net revenue ($B) $ 28.2 $ 28.4 (1 %)
GAAP operating margin 7.1 % 6.2 % 0.9 pts.
GAAP net earnings ($B) $ 1.4 $ 1.2 16 %
GAAP diluted net earnings per share $ 0.74 $ 0.63 17 %
Non-GAAP operating margin 8.5 % 7.9 % 0.6 pts.
Non-GAAP net earnings ($B) $ 1.7 $ 1.6 9 %
Non-GAAP diluted net earnings per share $ 0.90 $ 0.82 10 %
Cash flow from operations ($B) $ 3.0 $ 2.6 17 %

“HP is in a stronger position today than we’ve been in quite some time,” commented HP President and CEO Meg Whitman. “The progress we’re making is reflected in growth across several parts of our portfolio, the growing strength of our balance sheet, and the strong support we’re receiving from customers and channel partners. Innovation is igniting our comeback, and at a time when many of our competitors are confronting new challenges, two years of turnaround work is setting us up for an exciting future.”

Outlook

For the fiscal 2014 second quarter, HP estimates earnings per share to be in the range of $0.62 to $0.66.

For fiscal 2014, HP estimates earnings per share to be in the range of $2.85 to $3.00.

Asset Management

HP reports that it generated $3.0 billion in cash flow from operations in the first quarter, up 17 percent from the same period a year ago.

First-quarter 2014 segment results are as follows:

  • Personal Systems revenue was up 4 percent year-over-year with a 3.3 percent operating margin. Commercial revenue increased 8 percent and Consumer revenue declined 3 percent. Total units were up 6 percent with Desktops units down 3 percent and Notebooks units up 5 percent.
  • Printing revenue was down 2 percent year-over-year with a 16.8 percent operating margin. Total hardware units were up 5 percent with Commercial hardware units up 6 percent and Consumer hardware units up 4 percent. Supplies revenue was down 3 percent.
  • Enterprise Group revenue was up 1 percent year-over-year with a 14.4 percent operating margin. Industry Standard Servers revenue was up 6 percent, Storage revenue was flat, Business Critical Systems revenue was down 25 percent, Networking revenue was up 4 percent, and Technology Services revenue was down 4 percent.
  • Enterprise Services revenue was down 7 percent year-over-year with a 1 percent operating margin. Application and Business Services revenue was down 4 percent, and Infrastructure Technology Outsourcing revenue declined 9 percent.
  • Software revenue was down 4 percent year-over-year with a 15.8 percent operating margin. Support revenue was down 2 percent, license revenue was down 6 percent, professional services revenue was down 12 percent and software-as-a-service (SaaS) revenue was up 6 percent.
  • HP Financial Services revenue was down 9 percent year-over-year with a 6 percent decrease in net portfolio assets and an 18 percent increase in financing volume. The business delivered an operating margin of 11.6 percent.
  • Corporate Investments revenue increased due to the sale of a portfolio of mobile computing intellectual property.
     More information on HP’s earnings, including additional financial analysis and an earnings overview presentation, is available on HP’s Investor Relations website at www.hp.com/investor/home.

HP’s Q1 FY14 earnings conference call is accessible via an audio webcast at www.hp.com/investor/2014Q1webcast.

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