Today HP announced its third quarter financial performance, including revenue of $ billion, down 8% year over year. The company earned $0.86 per share on a non-GAAP basis. The street had expected revenue of $27.3 billion, and earnings per share of $0.86 on a non-GAAP basis.
Today a number of executive changes leaked that were not detailed in HP’s earnings release, including the move of its Chief Marketing Office, Marty Homlish, and the Enterprise Group Executive Vice President Dave Donatelli to new roles.
HP’s personal computing division posted revenue of $7.7 billion billion, down 11% year over year. The larger personal computing market – measured as laptop and desktop shipments, and not tablets and smartphones – is in sharp decline, with shipments falling 11% in the second quarter, following a record 13.9% decline in the first quarter, both measured on a year over year basis.
In after hours trading, following its slight earnings miss, HP is down sharply. HP lost around 2% in regular trading.
HP’s top line is in slow decline. Though its revenue sources a decently varied – services, printing, and its personal computing OEM business – the firm as a whole has seen sequentially declining revenue in every quarter for more than a year.
In 2011, HP’s revenues totaled $127 billion. In 2012, full year revenue was $120 billion. Analysts expect around $111 billion in the current calendar year, and $107 billion in 2014 top line. HP, as a recent CNBC segment noted, has more than three hundred thousand employees, providing it with ample room to cut costs. By doing so it can sustain profitability at levels previously attained with higher revenue, and not lower expenses.
However, that dance becomes harder in time. What HP needs to prove is that it can grow its non-PC and printing businesses to more than staunch declines in those two industries, but also to shift the company’s aggregate momentum away from measured decline.
The printing group at HP posts a year over year loss in revenue of 4%. That combined with the 11% slip in PC division revenue, and the magnitude of the task ahead of HP becomes plain.
Top Image Credit: Windell Oskay
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