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Revenues decline across HP Inc and Hewlett Packard Enterprise

Hewlett Packard Enterprise is betting on cloud and a relationship with Microsoft and HP Inc

HP has reported net revenue of $25.7bn for the fourth quarter of 2015, down 9% year-over-year. For the full year, revenue was $103.4bn, down 7% year-over-year.

Given the split into HP Inc and Hewlett Packard Enterprise (HPE) less than a month ago, the earnings reflect the position of the company prior to the split.

In a transcript of the earnings call posted on the Seeking Alpha website, CEO Meg Whitman said: “The segments that comprise HPE have now had two consecutive quarters of constant currency revenue growth. And we believe we’re in a strong position to deliver on our plans to grow overall in 2016.”

The company recently announced it would not be developing its own public cloud. Instead, Whitman said Hewlett Packard Enterprise Services will use its upcoming Discover conference to unveil details of how it will be working with Microsoft on using Azure as part of a hybrid cloud offering.

“We are the leading cloud infrastructure provider and we see a significant opportunity as enterprises move to a hybrid cloud environment. In October 2015 we announced HP Helion OpenStack 2.0, our latest enterprise-grade cloud platform with new lifecycle management and security enhancements,” she added.

The company also announced what Whitman described as a “significant new partnership with Microsoft and HP Inc” to enable Windows 10 adoption and drive employee mobility for the enterprise.

“As part of the agreement, we will build and sell industry-specific business applications for Windows 10 across key industries such as retail, energy and transportation. This agreement is a great example of how Hewlett Packard Enterprise and HP Inc will work together,” she said.

In the HP Inc business, personal systems revenue was down by 14% year-over-year, with a 3.8% operating margin. Commercial revenue decreased by 15% and consumer revenue decreased by 12%. Total units were down by 12%, with desktops units down 17% and notebooks units down 5%. Printing revenue was also down by 14% year-over-year.

HP Inc played down the decline. “In these challenging markets we are taking decisive actions that will protect our core business which generates the majority of our cash flows,” said Dion Weisler, president and chief executive officer of HP Inc.

“We firmly believe in our strategy and, given our scale, innovation, channel reach and brand, we are well positioned to gain profitable share in the markets where we choose to play.”

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Surprisinng to me I have always been a fan of HP. Will just have to wait to see what happens when the dust settles.
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