HP’s earnings came in ahead of expectations, but revenue was lower than expected.The company reported non-GAAP EPS of $0.92 on revenue of $30.0 billion.
That’s a drop of 32% and 7% respectively from last year, but it’s better than what Wall Street expected.
Analysts were expecting EPS of $0.87 on $30.7 billion.
The stock is down very slightly after hours on the news.
This was the first full quarter for Meg Whitman, who became CEO of HP in late September.
For PCs, the Personal Systems Group (PSG) revenue declined 15% year over year with a 5.2% operating margin. Sales to enterprise customers were down 7% but sales to consumers were down by 25%. High end PCs, known as workstations were a relative bright spot as revenue was flat. Total units were down 18%, with a 19% decline in desktop units and an 18% decline in notebook units.
Sales of iPads are definitely hurting traditional notebooks.
HP’s all important printer and imaging unit also posted to-be-expected declines. Imaging and Printing Group (IPG) revenue declined 7% year over year with a 12.2% operating margin. Commercial hardware revenue was down 5% year over year with commercial printer units down 10%. Consumer hardware revenue was down 15% year over year with a 15% decline in printer units.
Compared to Cisco’s revenue increases, HP’s networking division didn’t fare well. Enterprise Servers, Storage and Networking (ESSN) revenue declined 10% year over year with an 11.2% operating margin. Networking revenue was flat, Industry Standard Servers revenue was down 11%, Business Critical Systems revenue was down 27% and Storage revenue was down 6% year over year.
Now for the good news: Software revenue grew 30% year over year with a 17.1% operating margin, which includes Autonomy. Software revenue saw 12% licence growth, 22% support growth and 108% growth in services.
Services revenue of $8.6 billion grew 1% year over year with a 10.5% operating margin and HP Financial Services revenue grew 15% year over year at a 9.6% operating margin.
*Correction: The original version of this story said that HP missed earnings estimates. This was incorrect. We regret the error.
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