Feeds

HP paddles through Q3 slump on EDS lifeboat

Plank-walking activities for crew

Choosing a cloud hosting partner with confidence

The economy is still rough waters for tech companies, but Hewlett-Packard has again kept afloat by latching on services while tossing employees overboard.

Despite sharply declining sales of PCs, printers and software, HP's third quarter ended July 31, 2009 still arrived above most Wall Street expectations. The company's profit was $1.64bn, down 19 per cent from the same period last year. Excluding one-time items related to restructuring and acquisitions, the company would have earned $2.2bn.

Net revenue was $27.5bn, down two per cent compared to the same period last year. Of all HP's major businesses, only services had revenue growth year-over-year - largely due to the company's acquisition of EDS last year.

Broken down, HP's enterprise business sunk 23 per cent to $3.7bn, with enterprise storage and server both dropping 21 per cent respectively. Software revenue declined 22 per cent to $847m and HP's printer biz took a 20 per cent slide to $5.7bn.

The otherwise slumpy quarter was offset by HP's services unit which increased 93 per cent to $8.5 million. But as mentioned, that's primarily a result of the EDS acquisition.

Slow sales were further dulled by HP's continuing layoffs and salary cuts. In May, the company announced plans to axe 2 per cent of its 300,000-person workforce on top of 24,000 cuts planned during the acquisition of EDS. The company has also implemented across-the-board wage reductions to employees and tightened its belt on spending.

"Business is stabilizing, and we are confident that HP will be an early beneficiary of an economic turnaround and will continue to outperform when conditions improve," chief executive Mark Hurd said in a statement. He elaborated later in an analyst conference call that while he's encouraged by stability in the market, he's not ready to call it a turn around until the company gets a better idea of business spending in 2010.

"We expect 2010 will be a better year than 2009." Hurd told analysts.

The company expects 2009 fourth quarter revenue to be up about eight per cent sequentially. End-of-year revenue is predicted to land around four to five per cent below 2008's revenue total of $118.4bn. ®

Bootnote

While HP's current CEO was holding back on the turn-around talk, his predecessor Carly Fiorina took her first formal steps towards challenging California Democrat Barbara Boxer for the US Senate in 2010.

Fiorina has filed papers with the IRS for a tax-identification number that will allow her to open an account for campaign funds. If nominated for the Republican ticket in next year's election, she'll face Boxer who is seeking a fourth term in office.

"The people of California have serious concerns about job creation, economic growth and the role of government in solving problems that thouch each of our lives," Fiorina said in a statement.

The staunch Republican had been named as a potential running mate for John McCain before the presidential hopeful chose Alaska governor Sarah Palin. Fiorina went on to help lead the McCain campaign to a glorious defeat.

That successful foray into Republican-party politics followed a book tour after she was shown the door at HP in 2005 for engineering the unpopular $24bn merger with Compaq and generally acting like a celebrity. ®

Internet Security Threat Report 2014

More from The Register

next story
Bono apologises for iTunes album dump
Megalomania, generosity and FEAR of irrelevance drove group to Apple deal
HBO shocks US pay TV world: We're down with OTT. Netflix says, 'Gee'
This affects every broadcaster, every cable guy
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
French 'terror law' declares WAR on the INTERNET itself, say digi-rights folks
Liberté, Égalité, Fraternité: Two out of three ain't bad
SCREW YOU, EU: BBC rolls out Right To Remember as Google deletes links
Not even Google can withstand the power of Auntie
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.