Sluggish Quarter for HP as Split into Two Companies Approaches

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On August 20th, Hewlett-Packard reported results for its third-quarter, with net revenue of $25.3 billion, down 8 percent versus third-quarter 2014,  and net earnings of $0.9 billion, down 13 percent versus third-quarter 2014.

Earnings per share for the third quarter were $0.47, versus HP’s previously provided outlook of $0.50 to $0.54 per share, and down from the $0.52 for third-quarter 2014.

Segment results were as follows:

  • Revenue for HP’s Personal Systems group (PCs, tablets, etc.) was down 13 percent year-over-year with a 3.0 percent operating margin. Commercial revenue decreased 9 percent and consumer revenue decreased 22 percent. Total unit shipments were down 11 percent, with notebooks units down 3 percent, and desktops units down 20 percent.
  • Printing revenue was down 9 percent year-over-year with a 17.8  operating margin. Total hardware units were down 2 percent, with commercial hardware units down 6 percent, and consumer hardware units flat. Supplies revenue was down 6 percent.
  • Enterprise Group revenue was up 2 percent year-over-year with a 13.0 percent operating margin. Industry-standard servers revenue was up 8 percent, storage revenue was down 2 percent, business-critical systems revenue was down 21 percent, networking revenue was up 22 percent, and technology-services revenue was down 9 percent.
  • Enterprise-services revenue was down 11 percent year-over-year with a 6.0 percent operating margin.
  • Infrastructure-technology outsourcing revenue was down 13 percent, and application and business-services revenue declined 7 percent.
  • Software revenue was down 6 percent year-over-year with a 20.6 percent operating margin. License revenue was down 11 percent, support revenue was down 3 percent, professional-services revenue was down 8 percent, and software-as-a-service (SaaS) revenue was down 4 percent.
  • HP Financial Services revenue was down 6 percent year-over-year with a 2 percent decrease in net portfolio assets and a 2 percent decrease in financing volume. The business delivered an operating margin of 10.8 percent.


For its fiscal 2015 fourth quarter, HP estimates earnings per share to be in the range of $0.12 to $0.18.

For its entire fiscal 2015 year, HP estimates earnings per share to be in the range of $1.87 to $1.93. The fiscal 2015 year will include after-tax costs of approximately $1.72 per share related to HP’s separation into HP Enterprise and HP, Inc. on November 1st (see story here).

More Resources

August 2015: Memjet Files Patent-Infringement Lawsuit Against HP, Claims HP Infringed on Page-Wide Printing Patents

July 2015: HP Takes ‘Important Step’ in November Company Split with SEC Filing

May 2015: Slow Second Quarter for HP and Printing Group, Earnings Slide

February 2015: Slow Quarter for HP, but Printer Earnings Strong

January 2015: HP Announces New Chain of Command for HP Enterprise and HP Inc.

December 2014: HP: Triple-Digit Growth for Officejet X Printers, New Toner Supplies to Deter Third-Party Cloning on the Way

November 2014: Flat Fourth Quarter for HP; Reports Full-Year Results

October 2014: HP to Split into Two Companies, One Dedicated to Enterprise Solutions, One to Personal Computing and Printing

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