HP Reports Fiscal 2014 Net Revenue of $111.5 Billion

HP has announced financial results for fiscal 2014 and fourth quarter ended Oct. 31, 2014. Fiscal 2014 net revenue of $111.5 billion was down 1% from the prior-year period and flat on a constant currency basis.
 
Fiscal 2014 GAAP diluted net earnings per share (EPS) was $2.62, flat in comparison with the prior-year period amount and within the previously provided outlook of $2.60 to $2.64 per share. Fiscal 2014 non-GAAP diluted net EPS was $3.74, up from $3.56 in the prior-year period and within the previously provided outlook of $3.70 to $3.74 per share. Fiscal 2014 non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $2.1 billion and $1.12 per diluted share, respectively, related to restructuring charges, the amortization of intangible assets and acquisition-related charges.
 
Fourth quarter net revenue of $28.4 billion was down 2% from the prior-year period and down 3% on a constant currency basis.
 
Fourth quarter diluted net GAAP EPS was $0.70, down from $0.73 in the prior-year period and within its previously provided outlook of $0.67 to $0.71 per share. Fourth quarter non-GAAP diluted net EPS was $1.06, up from $1.01 in the prior-year period and within its previously provided outlook of $1.03 to $1.07. Fourth quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $684 million and $0.36 per diluted share, respectively, related to restructuring charges, the amortization of intangible assets and acquisition-related charges.
 
“I’m excited to say that HP’s turnaround continues on track,” said Meg Whitman, chairman, president and CEO, HP. “In FY14, we stabilized our revenue trajectory, strengthened our operations, showed strong financial discipline, and once again made innovation the cornerstone of our company. Our product roadmaps are the best they’ve been in years and our partners and customers believe in us. There’s still a lot left to do, but our efforts to date, combined with the separation we announced in October, sets the stage for accelerated progress in FY15 and beyond.”
 
For fiscal 2015, HP estimates non-GAAP diluted net EPS to be in the range of $3.83 to $4.03 and GAAP diluted net EPS to be in the range of $3.23 to $3.43. Fiscal 2015 non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.60 per share, related primarily to the amortization of intangible assets and restructuring charges.
 
For the fiscal 2015 first quarter, HP estimates non-GAAP diluted net EPS to be in the range of $0.89 to $0.93 and GAAP diluted net EPS to be in the range of $0.72 to $0.76. Fiscal 2015 first quarter non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.17 per share, related primarily to the amortization of intangible assets and restructuring charges.
 
HP generated $2.7 billion in cash flow from operations in the fourth quarter, down 4% from the prior-year period.
 
Personal Systems revenue was up 4% year over year with a 4.0% operating margin. Commercial revenue increased 7% and Consumer revenue decreased 2%. Total units were up 5% with Desktops units down 2% and Notebooks units up 8%.
 
Printing revenue was down 5% year over year with an 18.1% operating margin. Total hardware units were down 1% with Commercial hardware units up 5% and Consumer hardware units down 4%. Supplies revenue was down 7%.
 
Enterprise Group revenue was down 4% year over year with a 14.8% operating margin. Industry Standard Servers revenue was down%, Storage revenue was down 8%, Business Critical Systems revenue was down 29%, Networking revenue was up 2% and Technology Services revenue was down 3%.
 
Enterprise Services revenue was down 7% year over year with a 6.8% operating margin. Application and Business Services revenue was down 6% and Infrastructure Technology Outsourcing revenue declined 7%.
 
Software revenue was down 1% year over year with a 31.1% operating margin. License revenue was up 2%, support revenue was down 1%, professional services revenue was down 5% and software-as-a-service (SaaS) revenue was flat.
 
HP Financial Services revenue was down 1% year over year with a 1% decrease in net portfolio assets and a 15% increase in financing volume. The business delivered an operating margin of 12.1%.