Tough Fourth Quarter for HP as Split is Completed
HP Inc. today announced Hewlett-Packard Company financial results for fiscal-year 2015 and the fourth quarter that ended on October 31, 2015. These results include results for both Hewlett-Packard Enterprise Company, Hewlett-Packard Company’s former enterprise-technology infrastructure, software, services and financing businesses, which separated from Hewlett-Packard Company on November 1st. With this separation, Hewlett-Packard Company changed its name to HP Inc. on October 31st. Consequently, “HP” refers to Hewlett-Packard Company. Note that HP Inc. focuses on personal systems (desktop, laptop and personal computing systems, as well as printing, while HP Enterprise focuses on software and solutions for enterprises.
Hewlett-Packard Fiscal-Year 2015
HP reported fiscal-year 2015 net revenue of $103.4 billion, down 7 percent from the prior-year period. Earnings per share for the year were $2.48, above HP’s previously provided outlook of $1.87 to $1.93 per share.
HP returned $4.1 billion to shareholders in the form of share repurchases and dividends in fiscal 2015, which was in excess of 100 percent of fiscal-year 2015 free cash flow
Hewlett-Packard Fourth-Quarter 2015
Fourth-quarter net revenue was $25.7 billion, down 9 percent from the prior-year period. Fourth-quarter net earnings were $0.73, above HP’s previously provided outlook of $0.12 to $0.18 per share.
In the fourth quarter, HP returned $0.6 billion to shareholders in the form of share repurchases and dividends.
Hewlett-Packard Fourth-Quarter 2015 Segment Results
Segment results were as follows:
- Personal Systems revenue was down 14 percent year-over-year with a 3.8 percent operating margin. Commercial revenue decreased 15 percent and Consumer revenue decreased 12 percent. Total units were down 12 percent, with Desktops units down 17 percent and Notebooks units down 5 percent.
- Printing revenue was down 14 percent year-over-year with a 17.4 percent operating margin. Total hardware units were down 17 percent, with Commercial hardware units down 23 percent and Consumer hardware units down 14 percent. Supplies revenue was down 10 percent.
- Enterprise Group revenue was up 2 percent year-over-year with a 14.0 percent operating margin. Industry Standard Servers revenue was up 5 percent, Storage revenue was down 7 percent, Business Critical Systems revenue was down 8 percent, Networking revenue was up 35 percent and Technology Services revenue was down 11 percent.
- Enterprise Services revenue was down 9 percent year-over-year with an 8.2 percent operating margin. Application and Business Services revenue was down 5 percent and Infrastructure Technology Outsourcing revenue declined 11 percent.
- Software revenue was down 7 percent year-over-year with a 30.1 percent operating margin. License revenue was down 6 percent, support revenue was down 9 percent, professional-services revenue was down 3 percent, and software-as-a-service (SaaS) revenue was down 2 percent.
- HP Financial Services revenue was down 11 percent year-over-year with a 2 percent increase in net portfolio assets and a 4 percent decrease in financing volume. The business delivered an operating margin of 10.8 percent.
Outlook for HP Inc.
For fiscal 2016, HP estimates non-GAAP (Generally Accepted Accounting Principles) net earnings per share to be in the range of $1.59 to $1.69, and GAAP net earnings per share to be in the range of $1.50 to $1.60. Fiscal 2016 non-GAAP earnings per share exclude costs estimated to be approximately $0.09 per share and exclude charges from pensions and restructuring costs.
For 2016’s first quarter, HP estimates non-GAAP net earnings per share to be in the range of $0.33 to $0.38, and GAAP earnings per share to be in the range of $0.27 to $0.32.
September 2015: HP Creating New 3D-Printing Group to Be Led by Steven Nigro
February 2015: Slow Quarter for HP, but Printer Earnings Strong