Slow Second Quarter for HP and Printing Group, Earnings Slide


HP CEO Meg Whitman

Hewlett-Packard yesterday reported results for its second quarter of 2015, with net revenue of $25.5 billion, down 7 percent versus the second quarter a year ago,  and net earnings per share of $0.55, versus the previously provided outlook of $0.57 to $0.61 per share. Net earnings were $1 billion, down 21 percent versus the second quarter a year ago.

HP also reported that it’s on track to complete its separation this October into two Fortune 500 companies, HP Inc., which will be devoted to PCs and printers, and HP Enterprise, which will be devoted to enterprise software and solutions. It expects the split to cost from $400 to $450 million. It also reported that current Chief Financial Officer (CFO) Cathie Lesjak will become chief financial officer of HP Inc., while Tim Stonesifer, CFO of HP’s Enterprise Group, will become CFO of Hewlett-Packard Enterprise.

Second-quarter financial results by segment are as follows:

  • Printing revenue was down 7 percent year-over-year. Total hardware units were down 4 percent with Commercial hardware units up 1 percent and Consumer hardware units down 6 percent. Supplies revenue was down 5 percent.
  • Personal Systems revenue was down 5 percent year-over-year. Commercial revenue declined decreased 7 percent and Consumer revenue declined 2 percent. Total units were up 2 percent, with Notebooks units up 19 percent and Desktops units down 14 percent.
  • Enterprise Group revenue was down 1 percent year-over-year. Industry Standard Servers revenue was up 11 percent, Storage revenue was down 8 percent, and Business Critical Systems revenue was down 15 percent, Networking revenue was down 16 percent and Technology Services revenue was down 8 percent.  HP also closed its acquisition of Aruba in May.
  • Enterprise Services revenue was down 16 percent year-over-year. Infrastructure Technology Outsourcing revenue was down 20 percent, and Application and Business Services revenue declined 8 percent.
  • Software revenue was down 8 percent year-over-year. License revenue was down 17 percent, support revenue was down 2 percent, professional services revenue was down 15 percent and software-as-a-service (SaaS) revenue was down 5 percent.
  • HP Financial Services revenue was down 7 percent year-over-year, with a 2 percent decrease in net portfolio assets and a 1 percent decrease in financing volume.

HP CEO Meg Whitman remained positive, saying: “I’m pleased with where we ended the quarter, the continued success of our turnaround, and the progress we’re making on separation. Despite some tough challenges, we executed well across many parts of our portfolio, sustained our commitment to innovation, and delivered the results we said we would. HP is becoming stronger as we head into the second half of our fiscal year and separation in November.”

The company also reported that the Chinese Tsinghua Holdings subsidiary, Unisplendour Corporation, will purchase a 51 percent stake in a new business called H3C, which will be made up of H3C Technologies and HP’s China-based server, storage, and technology-services businesses, for approximately $2.3 billion. HP says that by combining these two entities, the new H3C will be a “technology powerhouse” in China with a market-leading portfolio that will be number-one in networking and a leader in servers, storage and technology services.


  • For its fiscal 2015 third-quarter, HP estimates EPS to be in the range of $0.50 to $0.54.
  • For its complete fiscal year, HP estimates net EPS to be in the range of $2.03 to $2.23.

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