Log Management Authors: Dana Gardner, Pat Romanski, Elizabeth White, David H Deans, Carmen Gonzalez

Related Topics: Log Management, Microservices Expo

Log Management: Article

Meg Lowers HP Expectations

“We cannot depend on acquisitions,” Whitman said

HP Monday reported a better-than-expected $1.17 a share excluding items, down 12% year-over year, on $32.3 billion in non-GAAP revenues, up 1%, in its closely watched fiscal fourth quarter ended on October 31. Wall Street only expected to see $1.13 on $32.05 billion. HP’s own guidance was for $1.12-$1.16 on revenues of $32.1 billion-$32.5 billion.

On a more realistic GAAP basis, the numbers were uglier. Revenue was down 3% year-over-year to $32.1 billion and diluted EPS was all of 12 cents, down 89% from $1.10 year-over-year.

Looking ahead the company said it thought it could muster a modest adjusted 83 cents-86 cents a share this quarter (61 cents-64 cents in real life) against Wall Street projections of $1.11 and $4 excluding items for all of fiscal 2012 against analyst expectations of $4.54.

The company’s not projecting revenues for either the current quarter or for all of fiscal 2012 claiming EPS is a “better indicator of successful execution across its various business levers.” It’s supposed to be a way to focus on cash flow and profitable growth rather than revenue for revenue’s sake.

It is assumed that HP is setting the bar low enough it can hit the target or, God willing, exceed it and avoid the repeated depreciation of its own guidance that marked the three quarters that CEO Leo Apotheker was there before he was ousted. Q4’s results belong partly to Apotheker and partially to his September 22 replacement Meg Whitman, the former CEO of eBay.

In a statement, Whitman said, “We need to get back to the business fundamentals in fiscal 2012, including making prudent investments in the business and driving more consistent execution.”

Later she said the company needs to “reduce the drama” and “get out of the news cycle.” Tripping over its own feet is responsible for a third of its problems, she said.

Having paid well over $10 billion for Autonomy HP doesn’t have that much left in the kitty to spend on new acquisitions. HP salespeople won’t be selling Autonomy until next year but Autonomy is reportedly getting high- quality leads from HP.

HP currently has $8.1 billion in cash and more debt than it would like.

Whitman said on the conference call to expect a decline in revenue and profit in 2012 and no large M&A. Maybe it might do some software acquisitions of $500 million or at most $1 billion. It will have to rebuild its balance sheet, she said, and invest organically, including bolstering its sales force and speeding deliveries.

“We cannot depend on acquisitions,” Whitman said. R&D has to be rebuilt after cutting muscle, something that will take until 2014-15.

CFO Cathie Lesjak said the company is “remaining cautious heading into fiscal year 2012 but are focused on delivering our earnings outlook and driving shareholder value.” Lesjak expects margins to erode.

Whitman sees HP’s problems as the macroeconomy – it hasn’t factored in the possible “total meltdown of Europe” – China, where it needs to replace distribution deals lost when Apotheker toyed with the idea of dumping HP’s PC unit, and the Thai floods, which Whitman predicted would harry the entire industry well into next year. HP apparently bought every disk drive it could lay hands on starting last month but is still expecting shortages.

When HP posted its numbers its stock price briefly rallied after-hours then fell 2.5% below its $28.86 close, which was already down 4% after an utterly ghastly day for the markets.

HP said Q4 revenue from its benighted Personal Systems Group dropped 1.6% year-over-year with consumer revenues falling 9% and commercial up 5%. Total units were up 2% with 5% growth in desktop units and 1% growth in notebook units.

Revenues from printing, HP’s historic profit machine, dropped 10%. Commercial revenue was up 4% year-over-year with commercial printer units up 5%. Consumer printer hardware revenue was down 8% year-over- year with an 8% decline in units.

HP’s services business was up 2% year-over-year to $9.3 billion. Software jumped 28%; licenses were up 33%. The enterprise servers, storage and networking unit was down 4% to $5.7 billion although networking was up 5% and storage 4%. Lesjak blamed Oracle for problems moving Itanium servers.

The ladies warned that the company’s old-line business-critical servers, down 23% in Q4, would decline further. Industry standard server revenues were down 4%. Meg professed to have hopes for HP’s new ARM-based servers.

Financial services revenue grew 18% year-over-year driven by double-digit growth in both lease volume and portfolio assets.

BRIC revenues were up 9% despite hiccups in China.

It looks like killing Palm is going to cost close to $1.7 billion, more than the $1.2 billion HP paid for the joint last year. It’s still reportedly trying to cut a deal for webOS.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.

IoT & Smart Cities Stories
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Ben Perlmutter, a Sales Engineer with IBM Cloudant, demonstrated techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user e...
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
The Founder of NostaLab and a member of the Google Health Advisory Board, John is a unique combination of strategic thinker, marketer and entrepreneur. His career was built on the "science of advertising" combining strategy, creativity and marketing for industry-leading results. Combined with his ability to communicate complicated scientific concepts in a way that consumers and scientists alike can appreciate, John is a sought-after speaker for conferences on the forefront of healthcare science,...
Disruption, Innovation, Artificial Intelligence and Machine Learning, Leadership and Management hear these words all day every day... lofty goals but how do we make it real? Add to that, that simply put, people don't like change. But what if we could implement and utilize these enterprise tools in a fast and "Non-Disruptive" way, enabling us to glean insights about our business, identify and reduce exposure, risk and liability, and secure business continuity?
To Really Work for Enterprises, MultiCloud Adoption Requires Far Better and Inclusive Cloud Monitoring and Cost Management … But How? Overwhelmingly, even as enterprises have adopted cloud computing and are expanding to multi-cloud computing, IT leaders remain concerned about how to monitor, manage and control costs across hybrid and multi-cloud deployments. It’s clear that traditional IT monitoring and management approaches, designed after all for on-premises data centers, are falling short in ...
"The Striim platform is a full end-to-end streaming integration and analytics platform that is middleware that covers a lot of different use cases," explained Steve Wilkes, Founder and CTO at Striim, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"MobiDev is a Ukraine-based software development company. We do mobile development, and we're specialists in that. But we do full stack software development for entrepreneurs, for emerging companies, and for enterprise ventures," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
The deluge of IoT sensor data collected from connected devices and the powerful AI required to make that data actionable are giving rise to a hybrid ecosystem in which cloud, on-prem and edge processes become interweaved. Attendees will learn how emerging composable infrastructure solutions deliver the adaptive architecture needed to manage this new data reality. Machine learning algorithms can better anticipate data storms and automate resources to support surges, including fully scalable GPU-c...
As IoT continues to increase momentum, so does the associated risk. Secure Device Lifecycle Management (DLM) is ranked as one of the most important technology areas of IoT. Driving this trend is the realization that secure support for IoT devices provides companies the ability to deliver high-quality, reliable, secure offerings faster, create new revenue streams, and reduce support costs, all while building a competitive advantage in their markets. In this session, we will use customer use cases...
Machine learning has taken residence at our cities' cores and now we can finally have "smart cities." Cities are a collection of buildings made to provide the structure and safety necessary for people to function, create and survive. Buildings are a pool of ever-changing performance data from large automated systems such as heating and cooling to the people that live and work within them. Through machine learning, buildings can optimize performance, reduce costs, and improve occupant comfort by ...