Hewlett-Packard announced a $1.1 billion profit on its fiscal Q2 today, but the figures were not buoyed by the HP segment which makes replacement systems for HP 3000 migrators. Business Criticial Systems -- the group where Itanium systems are sold, along with the HP-UX that runs only on that server -- saw its sales drop 37 percent from the Q2 of last year.
The overall news was not as grim from the rest of HP Enterprise Group, the organization where Linux-capable ProLiant servers are sold along with networking gear. Enterprise Group revenue declined 10 percent year over year. Networking revenue was flat, but those Industry Standard Servers' revenue that drives Linux hosts was down 12 percent. Storage sales fell 13 percent and Technology Services revenue was down 3 percent year over year.
HP CEO Meg Whitman decided to shine the spotlight on HP's overall ability to beat the market's estimates for profits. The company posted a total of $27.6 billion in overall sales, which was a drop of 10 percent from 2012. Whitman had to point at the Non-Generally Accepted Accounting Pracitces numbers -- always more favorable -- to claim a win.
"We beat the upper end of our non-GAAP diluted [Earings Per Share] EPS outlook for the quarter by 5 cents per share, driven by better than expected performance in Enterprise Services and Printing, coupled with the accelerated capture of restructuring savings and improvement in our operations," said Whitman.
HP estimated its 2013 earnings to be in the range of $2.50 to $2.60, in line with HP's previously communicated outlook. For 2013, HP is accounting for after-tax costs of approximately $1 per share, "related primarily to the amortization of purchased intangible assets, restructuring charges and acquisition-related charges.
"I am encouraged by our performance in the second quarter, and I feel good about the rest of the year," added Whitman. "As I have said many times before, this is a multi-year journey. We have a long way to go, but we are on track to deliver on our fiscal 2013 non-GAAP diluted earnings per share outlook."
Support revenues showed just about the only significant uptick on the HP report. Support revenue was up 12 percent, while license revenue was down 23 percent and services revenue was down 5 percent year over year. Printing revenue declined 1 percent year over year. Total hardware units were down 11 percent year over year. Commercial hardware units were down 5% year over year, and Consumer hardware units were down 13 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 6percent year over year.
Software revenue was also down 3 percent year over year.
HP also announced its board of directors has declared a regular cash dividend of 14.52 cents per share on the company's common stock, which, as previously announced, reflects a 10 percent increase in amount compared to the previous quarterly dividend. The dividend, the third in HP's fiscal year 2013, is payable on July 3, 2013, to stockholders of record as of the close of business on June 12, 2013.
More information on HP's earnings, including additional financial analysis and an earnings overview presentation, is available on HP's Investor Relations website at www.hp.com/investor/home.
HP's Q2 FY13 earnings conference call is accessible via an audio webcast at www.hp.com/investor/2013Q2webcast.