HP CEO Meg Whitman
The OEM’s first quarter results saw revenue and cash flow decline.
The results, commented on by PC World, were said to paint a “bleak forecast” for the OEM ahead of its split into two separate companies later this year, as reported last year.
Net revenue fell five percent to $26.8 billion (€23.6 billion), while cash flow from operations fell 75 percent to $744 million (€655 million), and net profit fell four percent to $1.4 billion (€1.2 billion). On a segment basis, the Printing sector saw revenue fall five percent compared to last year, with total hardware units down four percent, commercial hardware units flat and consumer hardware units down by six percent, while supplies revenue fell five percent.
The Personal Systems unit meanwhile saw flat revenue, with commercial revenue falling by one percent and consumer revenue growing by two percent, while total PC shipments up nine percent – though this saw notebooks up by 21 percent and desktops down by seven percent. In the Enterprise group, revenue was again flat, while other areas saw mostly declines, and Enterprise Services revenue declined by 11 percent across the board. Finally, software revenue fell five percent, while Financial Services revenue was down by eight percent.
PC World noted that the OEM has in turn “lowered its financial outlook” for 2015, despite CEO Meg Whitman’s attempts to “get HP in shape” before the split in October, and the OEM itself pointed out that the US dollar having “strengthened considerably” has had a “significant impact” on its predictions for the future. PC World stated that the strong dollar’s “negative effects” include “making overseas sales seem smaller when they’re translated back into the home currency”.
Whitman stated: “With the first quarter of fiscal 2015 now behind us, the HP turnaround remains on track. We grew operating profit margins across all of our major business segments, increased investment in innovation, and executed well across key areas of our portfolio and in our separation activities. Our progress continues as we head into Q2.
“While we were able to manage the impact of currency in the quarter and deliver earnings as expected, we believe the impact on FY15 will be significantly greater than we anticipated in November. We’ll work hard to offset these impacts through re-pricing and productivity, but fully mitigating currency movements of this size would require reducing investments and mortgaging our future. We won’t do that.”