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Last Update: 23-Aug-12 09:07 ET
Hewlett Packard shares fall 6% following disappointing guidance
Hewlett-Packard (HPQ $17.99 -1.19) reported third quarter earnings of $1.00 per share, excluding non-recurring items, $0.02 better than the Capital IQ consensus of $0.98 an in-line with guidance from Aug 8 of ~$1.00, while revenues fell 4.9% year/year to $29.67 billion versus the $30.19 billion consensus. The company issued in-line guidance for fiscal year 2012 with lowered EPS EPS to $4.05-4.07, excluding non-recurring items, from $4.05-4.10 versus $4.06 consensus. Personal Systems Group revenue was down 10% YoY with a 4.7% operating margin. Commercial revenue decreased 9%, and Consumer revenue declined 12%. Desktop units were down 6%, notebook units were down 12% and total units were down 10%. Imaging and Printing Group (IPG) revenue declined 3% YoY with a 15.8% operating margin.
Commercial hardware revenue and units were up 4% YoY. Consumer hardware revenue was down 13% YoY with a 23% decline in printer units. Services revenue declined 3% YoY with an 11.0% operating margin. Technology Services revenue was down 1% YoY, Application and Business Services revenue was flat, and IT Outsourcing revenue declined 6% YoY. Enterprise Servers, Storage and Networking (ESSN) revenue declined 4% YoY with a 10.9% operating margin. Networking revenue was up 6%, Industry Standard Servers revenue was down 3%, Business Critical Systems revenue was down 16%, and Storage revenue was down 5% YoY. Software revenue grew 18% YoY with an 18.0% operating margin, including the results of Autonomy. Software revenue was driven by 2% license growth, 16% support growth, and 65% growth in services. HP Financial Services revenue was flat YoY as the 2% increase in net portfolio assets was offset by a 2% decrease in financing volume. The business delivered a 10.4% operating margin.
Commercial hardware revenue and units were up 4% YoY. Consumer hardware revenue was down 13% YoY with a 23% decline in printer units. Services revenue declined 3% YoY with an 11.0% operating margin. Technology Services revenue was down 1% YoY, Application and Business Services revenue was flat, and IT Outsourcing revenue declined 6% YoY. Enterprise Servers, Storage and Networking (ESSN) revenue declined 4% YoY with a 10.9% operating margin. Networking revenue was up 6%, Industry Standard Servers revenue was down 3%, Business Critical Systems revenue was down 16%, and Storage revenue was down 5% YoY. Software revenue grew 18% YoY with an 18.0% operating margin, including the results of Autonomy. Software revenue was driven by 2% license growth, 16% support growth, and 65% growth in services. HP Financial Services revenue was flat YoY as the 2% increase in net portfolio assets was offset by a 2% decrease in financing volume. The business delivered a 10.4% operating margin.
