Welcome!

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

Related Topics: Containers Expo Blog, Microservices Expo, Microsoft Cloud, Log Management, @CloudExpo, SDN Journal

Containers Expo Blog: Article

HP Bleak But Not as Bleak as Usual

In fact HP forecast Q2 earnings that exceeded Wall Street estimates

There wasn't anything particularly pretty about HP's first-quarter posting Thursday except that it was better than anybody expected, allowing CEO Meg Whitman to buy time and declare that her five-year turnaround is starting to take root and allowing punters to push the bedraggled stock up better than 5% after-hours.

In fact, although both sales and earning dropped in fiscal Q1 for the sixth consecutive time, HP forecast Q2 earnings that exceeded Wall Street estimates. It said profits, excluding items, will be 80 cents-82 cents a share, compared to estimates of 77 cents.

Uncharacteristically the company did not lower its forecast for the year. It still expects to earn $3.40-$3.60 a share, though the consensus has been for $3.32.

HP's fiscal Q1 revenue fell 5.6% year-over-year to $28.4 billion, compared to analyst estimates of $27.8 billion. Profits amounted to 82 cents a share, compared with estimates of 71 cents. Net income skidded 16% to $1.23 billion, or 63 cents a share GAPP, from $1.47 billion, or 73 cents, a year earlier.

HP itself only predicted earnings of 68 cents-71 cents a share in November.

Dell, by comparison, just saw its fiscal first-quarter revenue off 11% to $14.3 billion, while net income tumbled 31% to $530 million, or 30 cents a share. It's trying to go private thinking the best way to turn around is out of public view.

"While there's still a lot of work to do to generate the kind of growth we want to see, our turnaround is starting to gain traction as a result of the actions we took in 2012 to lay the foundation for HP's future," Meg said in the statement.

"Our primary focus is to deliver on the full-year outlook, and I feel good about the rest of the year. We'll be bringing a number of new programs and disruptive innovations to market in the coming quarters, and we expect the benefits from our restructuring will accelerate through fiscal 2013."

On of the things brightening her outlook is the imminent arrival of HP's ARM-based Project Moonshot microservers next quarter. The company is taking first orders now and the very first one came from Japan, whose grid was kicked around by the tsunami two years ago.

Whitman expects the widgetry to "revolutionize the economics of the data center," and said that if 10 large web services switched to Moonshot servers, they could save $120 million a year and keep a million metric tons of CO2 from polluting the atmosphere. She figures they could save 89% on power, 94% on space and 63% on cost.

Anyway, back to the here and now. According to the press release:

  • PC sales fell 8%. Sales to commercial accounts fell 4% and 13% to consumers. Desktop sales rose 10%; notebook sales fell 14%. Total unit sales fell 5%, a little more than Gartner's global numbers.
  • Printing revenue dropped 5%, though operating margins were 16.1%. Units were down 11%. Commercial was down 6%, consumer 13%.
  • Enterprise revenue declined 4%. Networking was up 4%. Industry standard servers fell 3%. Business-critical servers, like HP's Itanium boxes, dropped 24% - again. Storage was down 13%. Servers are facing shrinking profit margins.
  • Enterprise services fell 7%.
  • Software sales fell by 2%. That would include HP's bête noire Autonomy. Apparently Vertica and security are doing okay. Support was up 11%, license revenue down 16%, service revenue down 8%.

HP has previously said it expected revenue in each of its major businesses to fall this fiscal year.

It made some progress paying down its debt. The net debt of HP's operating company dropped a billion dollars to $4.7 billion, which shouldn't take too much longer to retire completely. HP generated $2.6 billion in operating cash flow in the quarter.

The company is down 15,300 people out of the 29,000 it wants to lay off to save money.

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
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: Driving Business Strategies with Data Science," is responsible for setting the strategy and defining the Big Data service offerings and capabilities for EMC Global Services Big Data Practice. As the CTO for the Big Data Practice, he is responsible for working with organizations to help them identify where and how to start their big data journeys. He's written several white papers, is an avid blogge...
Nicolas Fierro is CEO of MIMIR Blockchain Solutions. He is a programmer, technologist, and operations dev who has worked with Ethereum and blockchain since 2014. His knowledge in blockchain dates to when he performed dev ops services to the Ethereum Foundation as one the privileged few developers to work with the original core team in Switzerland.
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...
Dynatrace is an application performance management software company with products for the information technology departments and digital business owners of medium and large businesses. Building the Future of Monitoring with Artificial Intelligence. Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more busine...
Whenever a new technology hits the high points of hype, everyone starts talking about it like it will solve all their business problems. Blockchain is one of those technologies. According to Gartner's latest report on the hype cycle of emerging technologies, blockchain has just passed the peak of their hype cycle curve. If you read the news articles about it, one would think it has taken over the technology world. No disruptive technology is without its challenges and potential impediments t...
If a machine can invent, does this mean the end of the patent system as we know it? The patent system, both in the US and Europe, allows companies to protect their inventions and helps foster innovation. However, Artificial Intelligence (AI) could be set to disrupt the patent system as we know it. This talk will examine how AI may change the patent landscape in the years to come. Furthermore, ways in which companies can best protect their AI related inventions will be examined from both a US and...
Bill Schmarzo, Tech Chair of "Big Data | Analytics" of upcoming CloudEXPO | DXWorldEXPO New York (November 12-13, 2018, New York City) today announced the outline and schedule of the track. "The track has been designed in experience/degree order," said Schmarzo. "So, that folks who attend the entire track can leave the conference with some of the skills necessary to get their work done when they get back to their offices. It actually ties back to some work that I'm doing at the University of San...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...