Revenues are significantly down, across the business. But the company turned a small profit. Predictably, CEO Meg Whitman has hailed the result as a vindication of her ‘turnaround’ strategy.
Revenue for the quarter was US$27.2 billion, down 8% over the same quarter last year. But HP made a $1.4 billion profit, after losing a massive $8.9 billion in the third quarter last year after its disastrous purchase of British software company Autonomy and a massive writedown on its earlier purchase of services company EDS.
The real story is in the breakdown for the different parts of the company: PCs, down 11%. Printers, down 4%. Enterprise and Enterprise Services, each down 9%. Financial Services down 6%. The one segment to show an increase, though barely, was Software – up 1%.
As always, Whitman put a positive spin on the results:
In a subsequent interview with CNBC, Whitman said the company was still interested in smaller acquisitions, and that there was no intention of breaking up HP or selling off some of its divisions.
Whitman may see signs of a turnaround, but the market doesn’t. After the release of the financials HP’s shares fell sharply, by around 10%, after a massive selloff by institutional investors. Shares are now trading at $22.22, up from the low of $12.44 they hit in November last year, but significantly down from the $53.90 they reached in April 2010.
At the same time the results were published Whitman also announced a major reorganisation of the senior management team that reports to her. Chief operating officer Bill Veghte will become executive vice president and general manager of the HP Enterprise Group, which now includes HP’s cloud strategy. Former enterprise boss Dave Donatelli will take on a new role focused on ‘identifying early-stage technologies’. The vacant role of COO was not filled.
HP will also combine its marketing and communications under the leadership of Henry Gomez. Current marketing head Marty Homlish moves to the new role of ‘chief customer experience officer’.
Deck chairs? Titanic?