The EDS acquisition has bite HP in the behind as the computer making giant posted its biggest quarterly loss in history.
HP reported 3rd quarter loss of $8.9 billion mainly because it took an $8 billion charge to Electronic Data Systems, a company HP acquired back in 2008 for close to $14 billion. That was a decision made by former CEO Carly Fiorina.
Meg Whitman, HP president and CEO said HP is still in the early stages of a multi-year turnaround, and we’re making decent progress despite the headwinds. “During the quarter we took important steps to focus on strategic priorities, manage costs, drive needed organizational change, and improve the balance sheet. We continue to deliver on what we say we will do,” she said in a prepared statement.
Revenue from the Personal Systems Group was down 10 per cent year over year with a 4.7 per cent operating margin. Commercial revenue decreased nine per cent, and Consumer revenue declined 12 per cent. Desktop units were down six per cent, notebook units were down 12 per cent and total units were down 10 per cent.
Imaging and Printing Group revenue declined just three per cent year over year with a 15.8 per cent operating margin. Commercial hardware revenue and units were up four per cent year over year.
Consumer hardware revenue was down 13 per cent year over year with a 23 per cent decline in printer units.
Services revenue also declined three per cent year over year with an 11.0 per cent operating margin. Technology Services revenue was down one per cent year over year, Application and Business Services revenue was flat, and IT Outsourcing revenue declined six per cent year over year.
Enterprise servers, storage and networking (ESSN) revenue declined four per cent year over year with a 10.9 per cent operating margin. Networking revenue was up six per cent server revenue was down three per cent. Storage revenue was down five per cent year over year.
It wasn’t all bad news as the software revenue grew 18 per cent year over year with an 18.0 per cent operating margin, including the results of Autonomy. Software revenue was driven by two per cent license growth, 16 per cent support growth, and 65 per cent growth in services.
