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Hewlett-Packard Reports Earnings: It's A Beat!

Hewlett-Packard Reports Earnings: It's A Beat!
Tech2 min read

Meg Whitman

LinkedIn/HP

HP CEO Meg Whitman

Hewlett-Packard just reported earnings. Looks like CEO Meg Whitman is making actual progress on stopping the company's withering revenues.

Earnings per share came in at $1.01 and net revenue was $29.1 billion.

That's a nice beat!

Expectations were modest to say the least. The Street wanted earnings of $1 per share, down almost 14% from the same quarter last year. They wanted revenue of $27.91 billion, down 7%.

The guidance on the next quarter, Q1 2014, is EPS of $0.82 - $0.86. Analysts had estimated it at $0.85.

For the full year, HP reported $3.56 EPS, in line with guidance. HP had net revenue of $112.3 billion.

Whitman is two years into what she says is a five-year plan to turn the company around. She says HP won't start growing revenues again until 2014. Last month told analysts she expects HP to earn between $3.55 and $3.75 a share in 2014.

Here are the highlights from the earnings press release.

  • Fourth quarter non-GAAP diluted net earnings per share of $1.01, down 13% from the prior-year period
  • Fourth quarter GAAP diluted net earnings per share of $0.73, up from GAAP diluted net loss per share of $3.49 in the prior-year period
  • Fourth quarter net revenue of $29.1 billion, down 3% from the prior-year period and down 1% when adjusted for the effects of currency
  • Fourth quarter cash flow from operations of $2.8 billion, down 31% from the prior-year period
  • Returned $763 million to shareholders in the form of dividends and share repurchases in the fourth quarter
  • Improved operating company net debt position by $1.3 billion to an operating company net cash position in the fourth quarter, the seventh consecutive quarterly improvement of over $1 billion
  • Fiscal 2013 non-GAAP diluted net earnings per share of $3.56, within the previously provided outlook of $3.53 to $3.57
  • Fiscal 2013 GAAP diluted net earnings per share of $2.62, below the previously provided outlook of $2.67 to $2.71
  • Fiscal 2013 net revenue of $112.3 billion, down 7% from the prior year and down 5% when adjusted for the effects of currency

Fourth quarter fiscal 2013 segment results

  • Personal Systems revenue was down 2% year over year with a 3.0% operating margin. Commercial revenue increased 4% and Consumer revenue declined 10%. Total units were up 2% with Desktops units down 5% and Notebooks units up 3%.
  • Printing revenue was down 1% year over year with a 17.7% operating margin. Total hardware units were up 6% with Commercial hardware units up 9% and Consumer hardware units up 4%. Supplies revenue was down 4%.
  • Enterprise Group revenue was up 2% year over year with a 14.5% operating margin. Networking revenue was up 3%, Industry Standard Servers revenue was up 10%, Business Critical Systems revenue was down 17%, Storage revenue was up 1% and Technology Services revenue was down 6%.
  • Enterprise Services revenue declined 9% year over year with a 4.4% operating margin. Application and Business Services revenue was down 10%, and Infrastructure Technology Outsourcing revenue declined 9%.
  • Software revenue was down 9% year over year with a 30.8% operating margin. Support revenue was up 4%, license revenue was down 24%, professional services revenue was down 13% and software-as-a-service ("SaaS") revenue was up 15%.
  • HP Financial Services revenue was down 6% year over year with a 5% decrease in net portfolio assets and a 3% decrease in financing volume. The business delivered an operating margin of 11.2%.

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