HP Beats Expectations, Top-line Revenue Drops

By Gary Kim May 23, 2013

Despite a continuing slide in sales and profit, Hewlett-Packard posted second-quarter 2013 results that beat Wall Street expectations for the second quarter in a row. That’s good news for a firm admittedly in a turnaround situation.

HP earned a profit of a little more than $1 billion on sales of $27.6 billion, lower than the profit of $1.6 billion on sales of nearly $31 billion.

It also was the fourth quarter in a row where sales and profit were down from a year earlier.

Still, HP is yet early in a rebuilding effort. As might be said to be the case for many other companies in many other lines of business, top-line revenue growth is sluggish to non-existent, with earnings boosts coming from efficiency efforts.

While helpful in the short term, that is not a recipe for long-term success.

In fact, revenue declined in nearly all of HP’s business segments. Personal Systems revenue was down 20 percent year over year. Commercial revenue decreased 14 percent and consumer revenue declined 29 percent.

Total units shipped declined 21 percent, with desktops units down 18 percent and notebook shipments down 24 percent.

Printing revenue declined 1 percent year over year. Total hardware units shipped were down 11 percent year over year. Commercial hardware units shipped declined 5 percent year over year, while consumer hardware shipments were down 13 percent, year over year.

Enterprise Group revenue declined 10 percent, year over year. Networking revenue was up 1 percent, while Industry Standard Servers revenue was down 12 percent.

Business Critical Systems revenue was down 37 percent, Storage revenue was down 13 percent and Technology Services revenue was down 3 percent, year over year.

Enterprise Services revenue declined 8 percent year over year. Application and Business Services revenue was down 10 percent year over year, and IT Outsourcing revenue declined 6 percent year over year.

Software revenue was down 3 percent year over year. Support revenue was up 12 percent while license revenue was down 23 percent and services revenue was down 5 percent year over year.

HP Financial Services revenue was down nine percent year over year.

“HP’s Q2 2013 financial results are a reminder that, as its CEO Meg Whitman is reiterating that the restructuring is not linear and will take further four years,” said Tom Reuner, principal analyst at Ovum. “Thus, slightly beating HP’s guidance should not be misunderstood as turnaround but as an improvement in its operational efficiency.”




Edited by Alisen Downey

Contributing Editor

SHARE THIS ARTICLE
Related Articles

Bloomberg BETA: Models Are Key to Machine Intelligence

By: Paula Bernier    4/19/2018

James Cham, partner at seed fund Bloomberg BETA, was at Cisco Collaboration Summit today talking about the importance of models to the future of machi…

Read More

Get Smart About Influencer Attribution in a Blockchain World

By: Maurice Nagle    4/16/2018

The retail value chain is in for a blockchain-enabled overhaul, with smarter relationships, delivering enhanced transparency across an environment of …

Read More

Facebook Flip-Flopping on GDPR

By: Maurice Nagle    4/12/2018

With GDPR on the horizon, Zuckerberg in Congress testifying and Facebook users questioning loyalty, change is coming. What that change will look like,…

Read More

The Next Phase of Flash Storage and the Mid-Sized Business

By: Joanna Fanuko    4/11/2018

Organizations amass profuse amounts of data these days, ranging from website traffic metrics to online customer surveys. Collectively, AI, IoT and eve…

Read More

Satellite Imaging - Petabytes of Developer, Business Opportunities

By: Doug Mohney    4/11/2018

Hollywood has programmed society into believing satellite imaging as a magic, all-seeing tool, but the real trick is in analysis. Numerous firms are f…

Read More