Hewlett-Packard posted fourth quarter sales slightly below expectations with single-digit revenue declines in both its enterprise computing and services business for its fourth fiscal quarter ended Oct. 31.
Palo Alto, Calif.-based HP reported non-GAAP diluted earnings per share of $1.06 on sales of $28.41 billion for the quarter. The Wall Street consensus was $1.06 per share on sales of $28.76 billion.
HP said it expects earnings in the current quarter of 89 to 93 cents a share, compared to a consensus view of 93 cents.
Total revenue for the year was $111.5 billion, down one percent year-on-year or flat on a constant currency basis. In an interview with Re/code, CEO Meg Whitman said she was pleased with holding the line on revenue. “We’ve stabilized the company with flat revenue, which is not what we aspired to when we started the year, but when you consider from whence we came, it’s pretty good,” Whitman said. Annual sales at HP have fallen by nearly $16 billion since its 2011 fiscal year.
Whitman blamed about half of the revenue miss on currency effects, which occur when U.S. companies who do business overseas are paid in local currency that is converted back to U.S. dollars, thus reducing the amount of revenue a company takes in. Whitman said the dollar strengthened against other currencies like the Japanese yen quickly during the quarter, making it difficult to enact hedging strategies that could limit that impact. “Currency can always have a big effect on a large company like ours, and when it moves so fast like that there’s almost nothing you can do to hedge against it,” Whitman said.
On a conference call with analysts, CFO Cathie Lesjak said the currency effects will continue into 2015, and may reduce revenue by two percent.
About the progress of HP’s impending split into two companies, Whitman said a “transition office” has been fully staffed with as many as 500 people whose job will be to focus specifically on the split. She said she expects the process to be complete by this time next year, though it could possibly slide into 2016.
“Our objective would be to have it completed by the time we close fiscal 2015,” she said. “We’ll know a little more about the timing during the first or second quarters.”
Asked during the conference call about the possibility of mergers or acquisitions before the split, Whitman said, “We still remain interested in acquiring assets that are the right thing for HP Inc or Hewlett-Packard Enterprise. That said, we’re not going to do things that aren’t good for shareholders.”
