Notebook sales strong for HP but overall revenues slide

Sales at HP fell during Q2 2015, however it reported gains in its notebook and server businesses.

For its fiscal quarter ending April 30th 2015, net revenue dropped seven per cent year-on-year to $25.5 billion, while net earnings fell 21 per cent to $1 billion.

Here’s how HP’s businesses fared during the period:

• Personal Systems revenue was down 5% year over year with a 3.0% operating margin. Commercial revenue decreased 7% and Consumer revenue decreased 2%. Total units were up 2% with Notebooks units up 19% and Desktops units down 14%.
• Printing revenue was down 7% year over year with an 18.3% operating margin. Total hardware units were down 4% with Commercial hardware units up 1% and Consumer hardware units down 6%. Supplies revenue was down 5%.
• Enterprise Group revenue was down 1% year over year with a 14.5% operating margin. Industry Standard Servers revenue was up 11%, Storage revenue was down 8%, Business Critical Systems revenue was down 15%, Networking revenue was down 16% and Technology Services revenue was down 8%. Additionally, HP closed its acquisition of Aruba in May.
• Enterprise Services revenue was down 16% year over year with a 4.0% operating margin. Infrastructure Technology Outsourcing revenue was down 20%, and Application and Business Services revenue declined 8%.
• Software revenue was down 8% year over year with a 17.9% operating margin. License revenue was down 17%, support revenue was down 2%, professional services revenue was down 15% and software-as-a-service (SaaS) revenue was down 5%.
• HP Financial Services revenue was down 7% year over year with a 2% decrease in net portfolio assets and a 1% decrease in financing volume. The business delivered an operating margin of 10.6%.

HP also said the separation of its PC/print and enterprise businesses ‘remains on track’ and is expected to be completed in November.

The company also announced new future leadership appointments for both companies.

Cathie Lesjak will become Chief Financial Officer of HP Inc, while Tim Stonesifer will become CFO of Hewlett Packard Enterprise. Chris Hsu will become COO at Hewlett Packard Enterprise, plus Alan May will join Hewlett Packard Enterprise as Head of Human Resources.

"I’m pleased with where we ended the quarter, the continued success of our turnaround, and the progress we’re making on separation," said Meg Whitman, chairman, president and CEO at HP. 

"Despite some tough challenges, we executed well across many parts of our portfolio, sustained our commitment to innovation, and delivered the results we said we would. HP is becoming stronger as we head into the second half of our fiscal year and separation in November."