Menu
HP reports $8.9B Q3 loss on writedowns, weak sales, lowers full-year forecast

HP reports $8.9B Q3 loss on writedowns, weak sales, lowers full-year forecast

HP announced a US$8.9 billion loss for its third quarter ended July 31 due to writedowns and weak hardware sales

Hewlett-Packard on Wednesday announced a US$8.9 billion loss for its third quarter ended July 31 due to writedowns and weak hardware sales and also said full-year results would be at the low end of its previous guidance.

Earlier this month, HP said it would take a $8 billion "impairment of goodwill" writedown against its services division. "Goodwill" refers to less tangible assets, such as brand strength, that are considered when figuring out a company's total value. HP's $13.9 billion acquisition of services provider EDS has been roundly criticized as too costly.

HP also said earlier this month that it would have a bigger than expected charge in the third quarter in connection with a workforce reduction plan announced earlier this year.

Revenue for the third quarter fell 5 percent year over year to $29.7 billion.

Without the writedowns and other one-time costs, third-quarter profits would have been $1.97 billion, down 9 percent year-over year.

Excluding one-time costs, full-year earnings per share will be $4.05 to $4.07. In May, HP said it expected full-year earnings of $4.05 to $4.10 per share.

Personal Systems Group revenue in the quarter fell 10 percent, with a 12 percent drop in consumer spending and a 9 percent fall in commercial purchases. Within the segment, desktop PC sales fell 6 percent and notebooks dropped 12 percent.

Imaging and Printing Group sales were down 3 percent. While commercial sales rose 4 percent, consumer purchases dropped 13 percent, according to HP.

Services revenue fell 3 percent.

Enterprise servers, networking and storage sales dropped 4 percent, with the biggest hit taken by Business Critical Systems, where revenue fell 16 percent. Networking sales rose 6 percent.

Software sales rose 18 percent, driven in part by last year's acquisition of Autonomy. However, new license growth, a key indicator of health in a software business and the mood of customers for starting new projects, rose only 2 percent. Software-related support revenue was up 16 percent and software services rose 65 percent.

HP rival Dell also released financial results this week, reporting Tuesday that second-quarter profit had fallen 18 percent due to lower sales of desktop PCs, laptops and other mobile products.

HP executives are expected to discuss the results further during a conference call later Wednesday.


Follow Us

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 international news

Featured

Slideshows

EDGE 2018: Kiwis kick back with Super Rugby before NZ session

EDGE 2018: Kiwis kick back with Super Rugby before NZ session

New Zealanders kick-started EDGE 2018 with a bout of Super Rugby before a dedicated New Zealand session, in front of more than 50 partners, vendors and distributors on Hamilton Island.‚Äč

EDGE 2018: Kiwis kick back with Super Rugby before NZ session
EDGE 2018: Kiwis assess key customer priorities through NZ research

EDGE 2018: Kiwis assess key customer priorities through NZ research

EDGE 2018 kicked off with a dedicated New Zealand track, highlighting the key customer priorities across the local market, in association with Dell EMC. Delivered through EDGE Research - leveraging Kiwi data through Tech Research Asia - more than 50 partners, vendors and distributors combined during an interactive session to assess the changing spending patterns of the end-user and the subsequent impact to the channel.

EDGE 2018: Kiwis assess key customer priorities through NZ research
Show Comments