Hewlett-Packard’s revenues and profits plunge: Company splitting in November

Technology major Hewlett-Packard has reported fall in profits and revenues, after being hit by the depleting sales of personal computers. In the three months to July 31, HP said its net income fell to US$854 million (AU$1187 million) from US$985 million (AU$1368 million) it posted a year ago. HP is one of the largest PC makers in the world.

HP’s total revenue crashed 8.1 percent to US$25.35 billion (AU$35.27 billion), with revenues of personal computer and printer business going down 11.5 percent. The net income for the quarter, which ended July 31, fell to US$900 million (AU$1.25 billion) from US$1 billion (AU$1.39 billion) in the same period in 2014. Net revenue fell 8 percent, to US$25.3 billion (AU35.27 billion), from US$27.6 billion (35.27 billion) a year ago. The fall in revenue was below the projections made by Wall Street analysts, who had expected the revenue to be US$25.44 billion (AU$35.4 billion), reports BBC.

Company split

The financial results assume significance in the wake of its formal bifurcation on November 1, with separation of its computer and printer business from corporate hardware and services operations. The restructuring has already led to tens of thousands of job cuts.

Meg Whitman, HP’s chief executive, explained the bifurcation as an effort at creating more nimble, focused companies that can navigate forces roiling the tech industry.

Falling sales

HP’s sales have fallen in 15 of the past 16 quarters and its Q3 looks no different. For the quarter, sales declined in five of HP’s six business segments, with the Enterprise Group’s 2 percent growth in revenue being the only bright spot.

In Q3, PC sales fell 13 percent to US$7.5 billion AU$10.4 billion), sale of printers dipped 9 percent to US$5.1 billion (AU$7.1 billion), Enterprise Services plummeted 11 percent to US$4.9 billion (AU$6.8 billion), Software crashed 6 percent to US$900 million (AU$1.25 billion) and Financial Services declined 6 percent to US$806 million (AU$1.12 billion), reports The Varguy.

Interestingly, the last financial report from Hewlett-Packard is preceding its split into two independently traded companies -- Hewlett Packard Enterprise, a company supplying technologies to businesses, and HP Inc., a PC and printer company.

Notwithstanding the leadership in PCs, the company has been struggling to adapt to the technology landscape where PCs are getting redundant, reports New York Times.

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