updated 04:31 pm EST, Tue November 26, 2013
Quarterly results barely meet street estimates, more transitions to come
HP today announced financial results for its fiscal fourth quarter and fiscal year that ended on October 31. The company reported fourth quarter diluted net earnings per share (EPS) at $0.73, up from a net loss per share of $3.49 in the prior-year period. Fourth quarter net revenue of $29.1 billion was down three percent from the prior-year period. Crucially, the company posted gains in enterprise services, the focus of its long-term recovery, buoying the hopes of investors.
"Through improved execution, strong cost management, and with the support of our customers and partners, HP ended fiscal 2013 on a high note," said Meg Whitman, HP president and chief executive officer. "Our Q4 results demonstrate that HP's turnaround remains on track heading into fiscal 2014. While we still have much more work to do, our business units and their core assets are delivering on HP's strategy to help customers thrive by providing solutions for the New Style of IT."
Personal Systems revenue was down two percent year-over-year with a three percent operating margin. Commercial revenue increased four percent, and consumer revenue declined 10 percent. Total units were up two percent, with desktop units down five percent and notebook units up three percent.
Printing revenue was down one percent year-over-year, with a 17.7 percent operating margin. Total hardware units were up six percent, with commercial hardware units up nine percent and consumer hardware units up four percent. Supplies revenue was down four percent.
Software revenue was down nine percent year-over-year, with a 30.8 percent operating margin. Support revenue was up four percent, license revenue was down 24 percent, professional services revenue was down 13 percent and software-as-a-service (SaaS) revenue was up 15 percent.
Enterprise Group revenue was up two percent year-over-year, with a 14.5 percent operating margin. Networking revenue was up three percent, Industry Standard Servers revenue was up 10 percent, Business Critical Systems revenue was down 17 percent, storage revenue was up one percent and Technology Services revenue was down six percent.
For fiscal 2014, HP estimates net EPS to be in the range of $3.55 to $3.75, in line with the outlook HP previously communicated at its October 9 securities analyst meeting. Fiscal 2014 net EPS estimates exclude after-tax costs of approximately $0.70 per share, related primarily to the amortization of intangible assets and restructuring charges in continuing efforts to sustain the company.