Hewlett-Packard, the computer and printer giant, reported continued declines in profit and sales on Thursday as it prepared to split into two companies later this year.
HP, based in Palo Alto, Calif., said on Thursday that net income in the fiscal second quarter fell 21 percent to $1 billion, or 55 cents a share, from the same quarter a year earlier. Revenue fell 7 percent to $25.5 billion.
Sales fell short of Wall Street analysts’ revenue expectations of $25.63 billion for the quarter, according to a survey by Thomson Reuters. Excluding some items, the company reported a profit of 87 cents a share, beating analyst estimates on that same basis of 86 cents.
“While we have some challenges, I’m pleased with where we ended the quarter,” said Meg Whitman, chief executive of HP, on the company’s earnings call.
The results give investors a progress report on Ms. Whitman’s plan to split HP into two companies: One will focus on enterprise-computing technologies like servers, and the other will sell products like personal computers and printers. The separation is set to happen at the end of October.
HP said the split remained on track and would initially incur operations costs of $400 million to $450 million.
The company also said it had appointed several new leaders for both companies. Cathie Lesjak, the chief financial officer, will become chief financial officer of HP Inc.; Chris Hsu will become head of operations for HP’s enterprise division; and Alan May will join HP’s enterprise division as head of human resources.
The split stemmed from a shifting technology landscape in which Ms. Whitman struggled to find a way to rev up HP’s growth. While HP is one of the world’s largest technology companies — making personal computers, computer servers, printers, data storage products and networking gear — many of those businesses have been battered over the last several years as the company contended with the move to mobile and cloud computing.
“Today I’m more convinced than ever this was the right thing to do,” Ms. Whitman said in the call, referring to the split. She added that dividing the company would allow each entity to discover new opportunities and reduce costs.
The two independent companies will each be large enough to enter the Fortune 500 and may be better able to react quickly to changing markets than within a large organization. Yet investors question whether the split will slow HP’s product creation and sales, as assets and roles are allocated, and whether competitors will exploit customer confusion to seize market share.
Since announcing the plan to split, HP has reported declining profit. In March, the company sharply lowered its outlook for annual earnings.
In anticipation of the separation, HP is shedding some assets. The company said on Thursday that it sold a 51 percent stake in its Chinese network business to Tsinghua University for about $2.3 billion. The move lets HP continue to sell equipment to businesses in China, which face government restrictions on use of foreign technologies.
Bill Kreher, an analyst at Edward Jones, said HP’s earnings illustrated that the company continued to perform while revenue was getting hurt by economic conditions. He said he was skeptical that HP would turn things around as two companies instead of one.
“Likely it helps speed up decision making, but I still believe that the turnaround will continue to require not only solid execution but a lot of patience,” he said.
For the quarter, revenue declined across HP’s portfolio of businesses. The drop was particularly steep for its enterprise services division: Sales fell 16 percent, and software revenue decreased 8 percent.
The strength of the American dollar also hurt HP, which makes many of its sales overseas. Ms. Whitman noted that the weakness of the yen gave the company’s Japanese competitors in the printing business an opening to aggressively price their products against HP’s.
Toni Sacconaghi, an analyst at Sanford C. Bernstein, said the earnings were “fine,” given that HP beat earnings estimates. He said a split would give each entity a chance to pursue different financial strategies, but at the end of the day, the two halves would be essentially the same company with some additional costs.
“There’s no magic about cutting an apple in two. It’s still an apple in two pieces. It’s not going to become bigger overnight,” Mr. Sacconaghi said.
- http://bit.ly/1AiqEK2
Niciun comentariu:
Trimiteți un comentariu