Flat Fourth Quarter for HP; Reports Full-Year Results

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November 26, 2014 – Hewlett-Packard today reported results for its fourth-quarter 2014 and for full-year 2014. 2014 net revenue was $111.5 billion, down 1 percent from the prior-year period, while 2014 net earnings per share (EPS) was $2.62, but within HP’s previously provided outlook of $2.60 to $2.64 per share. Net earnings for 2014 were $5.0 billion, down 2 percent versus net earnings of $5.1 billion for fiscal 2013.

Fourth-Quarter 2014 Results

Fourth-quarter net revenue was $28.4 billion, down 2 percent versus fourth-quarter 2013, while fourth-quarter EPS was $0.70, down 4 percent versus fourth-quarter 2013, but within HP’s previously provided outlook of $0.67 to $0.71 per share. Fourth-quarter cash flow from operations was $2.7 billion, down 4 percent from the prior-year period. Net earnings for the fourth quarter were $1.3 billion, down 6 percent versus net earnings of $1.4 billion for fourth-quarter 2013.

HP Chairman, President and CEO Meg Whitman commented, “I’m excited to say that HP’s turnaround continues on track. In FY14, we stabilized our revenue trajectory, strengthened our operations, showed strong financial discipline, and once again made innovation the cornerstone of our company. Our product roadmaps are the best they’ve been in years and our partners and customers believe in us. 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.”

Fourth-Quarter 2014 Segment Results:

  • Personal Systems (PC group) revenue was up 4 percent year-over-year, with a 4.0 percent operating margin. Commercial revenue increased 7 percent and Consumer revenue decreased 2 percent. Total units were up 5 percent with Desktops units down 2 percent and Notebooks units up 8 percent.
  • Printing revenue was down 5 percent year-over-year with an 18.1 percent operating margin. Total hardware units were down 1 percent, with Commercial hardware units up 5 percent and Consumer hardware units down 4 percent. Supplies revenue was down 7 percent.
  • Enterprise Group revenue was down 4 percent year-over-year with a 14.8 percent operating margin. Industry Standard Servers revenue was down 2 percent, Storage revenue was down 8 percent, Business Critical Systems revenue was down 29 percent, Networking revenue was up 2 percent and Technology Services revenue was down 3 percent.
  • Enterprise Services revenue was down 7 percent year-over-year with a 6.8 percent operating margin. Application and Business Services revenue was down 6 percent and Infrastructure Technology Outsourcing revenue declined 7 percent.
  • Software revenue was down 1 percent year-over-year with a 31.1 percent operating margin. License revenue was up 2 percent, support revenue was down 1 percent, professional services revenue was down 5 percent and software-as-a-service (SaaS) revenue was flat.
  • HP Financial Services revenue was down 1 percent year-over-year with a 1 percent decrease in net portfolio assets and a 15 percent increase in financing volume. The business delivered an operating margin of 12.1 percent.

Outlook
For fiscal 2015, HP estimates EPS to be in the range of $3.23 to $3.43.

For the fiscal 2015 first quarter, HP estimates EPS to be in the range of $0.72 to $0.76.

HP’s fiscal 2015 full year and first quarter outlooks don’t include costs for the division of HP into two companies, which should be completed early next year.

More Resources:

HP Delivers its First 3D Printer, Said to be Faster and Offering More Object Strength and Detail

HP to Spit into Two Companies, One Dedicated to Enterprise Solutions, One to Person Computing and Printing

Slight Revenue Increase for HP; Printing Revenue Down, but PC Revenue Up

In ‘Disruptive Move,’ HP Will Bring Page-Wide Color Inkjet Printing to Large-Format Production Printing

HP: Printing, Ink Continues to Bolster Revenue

HP Revenue Flat for Second Quarter; More Layoffs

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