Hewlett-Packard sucks wind with $8.9B loss, cuts outlook
HP's third quarter results are, well, not good. The company is "still in the early stages of a multi-year turnaround," CEO Meg Whitman says.
HP saw revenue declines in four of its six units due to economic "headwinds" and ongoing restructuring efforts, the company said. Oh, and it also reported an $8.9 billion net loss for the third quarter.
In other words, HP is "still in the early stages of a multi-year turnaround," said HP CEO Meg Whitman.
HP's third quarter results came in largely as expected. HP telegraphed that it would take hefty charges related to its enterprise services unit.
Meanwhile, HP cut its fiscal 2012 outlook. The company said its non-GAAP earnings would be $4.05 a share to $4.07 a share. Wall Street was expecting $4.07 a share for the year. HP also sees GAAP losses of $2.23 a share to $2.25 a share for the year.
The stat lines for HP largely show third quarter revenue declines across the board. To wit:
- PC revenue was down 10 percent from a year ago.
- Imaging and printing revenue fell 3 percent from a year ago.
- Services revenue fell 3 percent from a year ago.
- Enterprise servers, storage and networking sales fell 4 percent as business critical systems (Itanium) revenue dropped 16 percent.
- HP financial services revenue was flat.
- And software revenue was up 18 percent.
For the third quarter, HP reported a net loss of $8.9 billion, or $4.49 a share, on revenue of $29.7 billion, down 5 percent from a year ago. The loss is attributed to a goodwill charge related to the services unit and restructuring.
Excluding those charges---which totaled $10.8 billion---HP would have earned $1 a share. Those results were in line with the company's preannouncement.
HP reiterated that its plans were to restructure, manage costs closely and deliver on strategic changes all while improving the company's balance sheet.
By the numbers:
- HP generated $2.8 billion in cash flow in the third quarter.
- Inventory was $7.3 billion, up 1 day from a year ago to 29 days.
- Research and development spending was $854 million in the third quarter, up from $812 million a year ago.
- HP had cash and equivalents of $9.5 billion as of July 31.
- Notebook revenue fell 13 percent from a year ago.
- Printer supply revenue fell 3 percent from a year ago.
This item first appeared on ZDNet's Between the Lines blog under the headline "HP's Q3: Revenue declines plague units; Outlook lowered."