HP's Hurd points out flat and spotty US in Q3
Shows Wall Street its best face
HP boss Mark Hurd sketched out a "flattish" picture of the US market, but confirmed the company was seeing worldwide growth as he aired third quarter earnings yesterday.
Hurd also offered a couple of crumbs of detail on his ambitions for EDS – once the services giant has been borged by HP – and gave Wall Street analysts a European geography lesson into the bargain.
The numbers had already been flagged last week. But just in case you missed it, revenues were $28.3bn, up 11 per cent on the year, with net earnings of $2.1bn, a 16 per cent rise. This meant earnings per share of $0.80, or $0.87 non-GAAP.
The Americas were sluggish, with growth of just four per cent to $11.1bn, while EMEA was up 16 per cent to $11.9bn. Asia Pac was up $16 per cent to $5.2bn.
Third quarter revenues are expected to come in at $27.3bn to $27.4bn, with earnings per share of $0.76 to $0.77, or 0.82 to 0.83 non-GAAP.
Full year revenues will be $114.2bn to $114.4bn, with earnings per share of $3.30 to $3.34 or $3.54 to $3.58 non GAAP.
Inevitably the firm was seeing some effect from the financial problems in the US. Hurd admitted that the firm’s US performance was “flattish” but said its growth overall was testament to the diversity of its business. HP had carefully chosen its “spots” to target in the US, he said, both in terms of specific deals and specific technologies.
By contrast, Hurd described its European performance as “strong” explaining to Wall Street analysts that Europe actually consisted of lots of different countries, with different markets and sub markets at different stages of development. Who’d have thought it? Perhaps some of these guys might want to visit on vacation.
Hurd said he expected the EDS buy announced last week to accelerate the company’s push into “key enterprise accounts” admitting that “we are a great engineering and great customer support company but we have a market coverage problem”.
Hurd said the combined firm would continue HP’s policy of consolidating its datacentres. However, he was careful to point out that this applied to HP’s internal datacentres.
The EDS deal is expected to close in the second half of this year, and HP's current forecasts do not include the service firm's numbers.®