HP's profit slips 21 per cent as services business stumbles

The company says its on track to divide into two companies in November

Hewlett-Packard has reported another drop in quarterly revenue and profit, with a notable 16 percent slide in its enterprise services business.

The company said it's on track to divide itself into two companies later this year, but made a last minute change to its leadership plans: CFO Cathie Lesjak will move to HP Inc., the division that will sell PCs and printers, and not to HP Enterprise, as originally planned.

HP has been trying to expand its business for a few years without success, and the split is a bold gambit to see if can perform better as two companies. Revenue slipped 7 percent in the quarter ended April 30, to $US25.5 billion -- its 15th straight quarter of declining sales.

HP's PC business, which had been doing relatively well thanks to upgrades sparked by the end of support for Windows XP, contracted by 5 per cent from a year earlier, and its printer business, where HP gets much of its profit, shrank by 7 percent, the company announced Thursday.

It enterprise business also declined, with storage and network sales both down from last year. Its industry standard server business was a bright spot, growing 11 per cent.

But HP's enterprise services division, which generates nearly a fifth of its overall business, reported a sharp drop in sales, to $US4.8 billion from $US5.7 billion a year earlier.

HP's profit for the quarter was $US1.0 billion, down 21 per cent from the same quarter in 2014. Excluding costs of $US585 million related partly to the upcoming separation, HP reported earnings per share of $US0.87, in line with its own reduced forecast.

HP announced last year that it will break in two, with HP Inc. selling PCs and printers, and HP Enterprise selling data center equipment, software and enterprise services. Meg Whitman will be CEO of HP Enterprise, while Dion Weisler, who leads the PC and printing group today, will run HP Inc.

As CFO of HP Inc., "Lesjak's deep expertise will best serve Dion and his team as they embark on creating a new company," HP said Thursday. The CFO of HP Enterprise will now be Tim Stonesifer, who's currently CFO of HP's enterprise division. He was previously CFO for General Motors International Operations, in Shanghai.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags serversHewlett-Packardhardware systems

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?