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HP REVENUES WORSE THAN EXPECTED

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HP REVENUES WORSE THAN EXPECTED

HP REVENUES WORSE THAN EXPECTED

26 Nov 2014, 11:15 GMT

STOCK.com

[HP] - Hewlett-Packard’s first earnings statement since the company announced the plan to split its software and hardware businesses was a disappointment for investors.      

Image: courtesy of HP

 Highlights of HP Fiscal 2014 Full- Year and Fourth Quarter Results (Reported 25 Nov 2014):

  • Full year net revenue of $111.5 billion, down 1% from the previous year
  • Q4 net revenue of $28.4 billion, down 2% from the previous year, average analyst estimate $28.7 billion
  • Q4 Segment revenue: Personal Systems up by 4%, Printing down 5%, Enterprise Group down 4%, Enterprise Services down 7%, Software and HP Financial Services down by 1%.
  • Net earnings for the year are down 2% at $5 billion
  • non-GAAP diluted net earnings per share $3.74, within the previously provided outlook of $3.70 to $3.74 per share
  • GAAP diluted net earnings per share of $2.62, within the previously provided outlook of $2.60 to $2.64 per share
  • Q4 non-GAAP diluted net earnings per share of $1.06, up 5% from the previous year,  previously provided outlook $1.03 to $1.07 per share
  • Q4 GAAP diluted net earnings per share of $0.70, down 4% from the previous year, previously provided outlook $0.67 to $0.71 per share
  • Q4 cash flow from operations $2.7 billion, down 4% from the previous year
  • Returned $1.1 billion to shareholders in the form of share repurchases and dividends in Q4
  • Operating company net cash of $5.9 billion, a sequential improvement of $1 billion

GAAP – Generally accepted accounting principles, include the standards, conventions, and rules that accountants follow in recording, summarizing and preparation of financial statements.

Figures source: www.hp.com

Pre-market share price is down 2.31%, at 36.76. The shares have risen about 35% this year, but still are in the process of regaining their loss of market since the year 2011. The share price also recovered significantly since it dropped in October to 31.43 when the company announced its plan to split.

Meg Whitman, CEO of HP commented positively on the revenue report of her company: "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.” Whitman also revealed a bit about the future plans of HP, stating “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."

HP announced the split between its software and hardware businesses last month and it is expected to take about a year, as reported by Financial Times. Cathie Lesjak, HP CFO said that the usual large costs of splitting a company will not apply in HP’s case as there is no need for rebranding. The name and logo will stay the same and the new business will have a supply chain agreement to control the components’ costs, also reported by Financial Times.

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