Feeds

HP Q2 revenues leap like a dachshund

What to compare?

  • alert
  • submit to reddit

Bridging the IT gap between rising business demands and ageing tools

A year has passed since Hewlett-Packard bought Compaq, and the end results are still hard to measure.

HP churned out $659 million or $0.22 earnings per share on $18 billion in revenue for the second quarter. This compares to $252 million or $0.13 earnings per share with revenue of $10.6 billion in the same quarter one year ago. The 2002 second quarter results don't include figures from our friends at Compaq.

In its earnings announcement, HP decided to compare this quarter's $18 billion in revenue with the $17.9 billion in revenue reported in the prior quarter. Usually, analysts prefer to compare year-on-year numbers, but the HP/Compaq union has made things difficult.

CEO Carly Fiorina explained this decision during a conference call with analysts.

"Year-over-year comparisons are less relevant because HP and Compaq were separate companies with competing product lines, Fiorina said.

Fiorina then made an uncharacteristic turn, launching an invective against comptetitors IBM, Sun, EMC and Dell.

IBM's services business declined sequentially, she said. Sun's enterprise business has suffered from one quarter to the next, she said. The listing continued for some time.

All in all, HP wants to assure investors that it stacks up well against the competition in the near term. This method of measure, however, is not wholly satisfying, as it does not take into account each vendor's seasonal trends.

HP was willing to make year-on-year comparisons for the shining stars in its product line such as imaging and printing products and OpenView software. Compaq did not have competing products in these segments, which makes year-on-year comparisons fair game, Fiorina said.

The Numbers

HP trimmed losses in its enterprise hardware business down to $7 million from $83 million in the previous quarter. High-end Superdome server sales were up in the quarter, while midrange and low end system sales slowed.

The PC unit saw overall sales slide and a fall in profits from $33 million in the first quarter to $21 million in Q2. Profits rose to $918 million in the printing and imaging business, while the services group saw profits fall to $301 million down from $341 million in Q1.

As you may have guessed, year-on-year business segment comparisons were not provided.

HP cut 2,300 jobs last quarter and will cull another 3,500 workers by October. It has, however, doled out a company-wide raise for the first time in two years.

Looking Forward

HP executives were reluctant to speculate about third quarter results but backed analyst estimates for the second half of the fiscal year of $36.4 billion in revenue or $0.62 earnings per share.

The company hopes to make gains in the mobile computing, tablet PC and printing and imaging markets. Fiorina is convinced that HP can add more technology expertise than Dell in these areas where users are willing to pay a little more for the latest and greatest technology.

"I think we can absolutely out innovate (Dell) and that is why we are out growing them in notebooks," Fiorina said. "We are lengthening our lead there, and that is a more profitable segment."

HP will jostle back and forth with Dell as the leading PC seller for some time, Fiorina said.

"We don't think the number one position on a worldwide basis is the right goal," she said. ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple ran off to IBM
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.