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It looks like HP is back on track after what’s been a mostly awful year.HP reported Q4 earnings of $0.12 per share on revenue of $32.12 billion. Not including one-time charges of $3.3 billion — mostly related to the end of the Palm hardware business — EPS would have been $1.17.
Analysts were expecting EPS of $1.13 on revenue of $32.05 billion.
On the earnings call, Whitman said, “I know we didn’t live up to our expectations in 2011.” But she said that she had accomplished her three short-term priorities: beating Q4 expectations, make a decision regarding the PC business, and integrate Autonomy.
She also said she keeps getting one big question from customers: “what is HP?”
Her answer: “The largest provider of information technology infrastructure, software, services, and solutions to individuals and organisations of all sizes.”
Whitman promised, “We need to be simpler, clearer, and more consistent. No more surprises.”
Although earnings beat expectations, growth was still pretty anemic. Revenue only rose 1% from last year, or was down 1% excluding the benefits of foreign exchange rates.
And the consumer business was a real dog as it’s been for the last few quarters: overall consumer revenue was down 9%, mostly because of a 10% drop in imaging and printing revenue to $6.3 billion. Whitman said the printing business had a huge slowdown in the second half of the year because of the economy and an inventory correction, but she doesn’t see it as the beginning of the end of printing.
The Personal Systems Group — the PC business that HP considered selling before changing its mind last month — was off 2% from last year, to $10.2 billion.
Whitman admitted that the company’s change of mind on hardware really hurt its brand and sales, particularly in China. She had some customers call her thinking that HP is getting out of hardware completely. “No question we did ourselves in there.”
The enterprise business was also down 4%, to $5.7 billion.
Whitman warned that revenue and earnings would continue to decline in the coming fiscal year, but the company will continue to generate solid cash flow. In particular, the Critical Business Systems business, which consists of Itanium servers, will continue to decline. Earlier this year, database vendor (and HP competitor) Oracle said it would stop supporting Itanium, which is apparently affecting sales.
CFO Cathie Lesjack also said that the company is changing its focus to earnings rather than revenue, and will no longer be offering forward revenue guidance — only EPS guidance.
After hours, the stock rose briefly after the release crossed the wire, but is now down almost 3% from where it closed.
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