November 30, 2015
Final HP fiscal result toes an enterprise start
HP reported lower sales and profits as a combined company in its final fiscal report of 2015's Q4 and FY '15. Starting with the next report, two companies named HPQ and HPE on the New York Stock Exchange will post individual reports. They'll continue to operate on the same fiscal calendar.
The Q4 that ended on Oct. 31 showed an HP still fighting headwinds, as the company financial management likes to describe falling sales and orders periods. The year had $103 billion in sales, down 7 percent. Earnings for the combined company were $2.48 on the year, off 5 percent. But the final quarter of combined operations permitted HP to toe a starting line with a 4 percent increase for Q4 profits. Profits for the fiscal year were slightly off, dropping 1 percent.
Of course, those numbers reflect a company which won't exist anymore as we've come to know it. The vendor which created the HP 3000 and now sells and supports replacement systems at migrated sites lives on in Hewlett-Packard Enterprise. That company started out with stock prices behind the HP Inc company, the new entity that sells printers and PCs. But the headwinds are much stiffer there, so of late HPE has traded at higher prices than the business spun off on Nov. 1.
The two units supporting 3000 replacements held their own. A drop in Business Critical Systems sales, the home of Integrity and Itanium, continued, but at a slower rate.
Enterprise Group revenue was up 2 percent year over year with a 14.0 percent operating margin. Industry Standard Servers revenue was up 5 percent, Storage revenue was down 7 percent, Business Critical Systems revenue was down 8 percent, Networking revenue was up 35 percent and Technology Services revenue was down 11 percent.
Enterprise Services revenue was down 9 percent year over year with an 8.2 percent operating margin. Application and Business Services revenue was down 5 percent and Infrastructure Technology Outsourcing revenue declined 11 percent.
"Overall, Hewlett Packard Enterprise is off to a very strong start," said Hewlett-Packard Enterprise CEO Meg Whitman. "First and foremost, the segments that comprise HPE have now had two consecutive quarters of constant currency revenue growth and we believe we are in a strong position to deliver on our plans to grow overall in FY 16 in constant currency."
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