Leroy N. Soetoro
2015-05-22 17:29:34 UTC
http://www.wsj.com/articles/h-ps-earnings-top-views-despite-revenue-drop-
1432239957
Hewlett-Packard Co.s upcoming breakup into two separate companies will
cost billionsbut there will be $1 billion in cost savings too, the
company said Thursday.
The storied Silicon Valley institution will formally divide into two
public companies by Nov. 1: HP Inc. will be the PC-and-printer company and
Hewlett-Packard Enterprise will sell business software, servers and
networking gear. H-P has said it would spend $1.8 billion in restructuring
and a further $950 million in taxes to accomplish the split.
In reporting earnings for the second quarter ended April 30, it warned of
another $400 million to $450 million in dis-synergy costs from
duplicating functions formerly handled by single departments.
Those come about as a result of having to replicate corporate functions:
Things like having to have two CFOs, two treasurers and two general-
counsels, said Cathie Lesjak, H-Ps chief financial officer.
H-P said it would incur an additional one-time charge of $1 billion in
connection with the separation. It also announced a further $2 billion in
restructuring costs in its Enterprise Services group. Toni Sacconaghi, an
analyst with Bernstein Research, said the latter expense most likely would
result from reducing head count. Thats a very significant incremental
set of workforce reductions. That will be tens of thousands of people.
But H-P would cut costs too, Ms. Lesjak said. As a result of the
separation, we think that there will be opportunities to find some cost
savings.
H-P didnt explain where the savings would come from.
Meanwhile, the company is struggling to boost revenue in a sluggish PC
market. It reported on Thursday a 7% drop in revenue for the quarter, hurt
by a strong U.S. dollar and declines in all the companys major segments.
It was the 14th decline, year-over-year, in the past 15 quarters.
Moreover, the company issued downbeat earnings guidance for the current
quarter.
H-Ps PC group was hit harder than expected, with revenue down 5%. The
software group was no healthier, down 8% year-over-year, as was enterprise
services, down 16%.
But Chief Executive Meg Whitman was able to point out some bright spots.
Sales of Intel-based serversa troubled business a couple of years
agowere up 11% year-over-year. The PC market was tough, but we gained
share in every region, in just about every product category, she added.
The companys earnings per share of 87 cents, excluding certain items,
beat expectations, and H-P maintained its outlook for the year. Shares of
H-P, which were off 16% for the year as of Thursdays market close, rose
1.1% to $34.21 in after-hours trading. Net income fell to $1.01 billion
from $1.27 billion.
The company will lay out the financial details of the two new H-Ps, both
of which are due to rank as Fortune 50 companies, in SEC documents
expected to be filed in July. H-P is dividing up the companys staff of
300,000, real estate at 600 locations and a Gordian knot of 2,700
information-technology systems in 170 countries. It has assembled a team
of several hundred employees to manage the massive task.
H-P spooked investor confidence in the split with its first-quarter
financial report, which cut earnings guidance and disclosed the $1.8
billion in restructuring costs.
But it looks as though the H-P split makes sense, Mr. Sacconaghi said. The
resulting companies will likely offer distinct value propositions, he
said, with HP Inc. driving dividends to investors and HP Enterprise being
an earnings-per-share growth pick.
Also on Thursday, H-P announced that Chinas Tsinghua Holdings Subsidiary
would spend $2.3 billion acquiring a 51% stake in a newly created business
comprising H-Ps H3C Technologies Co., a seller of networking hardware,
and H-Ps server, storage and support business in China.
The companys quarterly revenue of $25.5 billion fell below the $25.635
billion projected by Wall Street analysts. The company had warned that the
strong dollar would hurt results. The revenue decline was 2% on a
constant-currency basis, H-P said.
H-P said it expected per-share earnings excluding items of 83 cents to 87
cents for the third quarter. Analysts polled by Thomson Reuters had
projected 87 cents.
Josh Beckerman contributed to this article.
Write to Robert McMillan at ***@wsj.com
When HP attempted to lock users into HP service by restricting patches and
firmware downloads for crappy commodity Intel servers, this loss was
predictable, and it will get even worse this year no matter what they do.
Comments:
Frank Anderson 28 minutes ago
Has there ever been a non-bank that has destroyed more shareholder monies
than this group?
George TrebaolGeorge Trebaol 57 minutes ago
In my opinion, they should manage what they have as an integrated company
more effectively and not waste billions of investors' money trying in re-
invent themselves.
Gordon LairdGordon Laird 1 hour ago
Same page of same day of this journal; Scott McNealy is back. I could be
just remarkable coincidence, but the rational behind HP's latest move, has
Scott's fingerprints all over it.
--
Obama increased total debt from $10 trillion to $18 trillion in the six
years he has been in office.
The only American president to deliberately import a lethal infectious
disease from Africa, Ebola.
Barack Obama, reelected by the dumbest voters in the history of the United
States of America.
Loretta Fuddy, killed after she "verified" Obama's phony birth
certificate.
Nancy Pelosi, Democrat criminal, accessory before and after the fact to
improper vetting of Barry Soetoro aka Barack Hussein Obama, a confirmed
felon using SSAN 042-68-4425, belonging to a dead man.
Obama ignored the brutal killing of an American diplomat in Benghazi, then
relieved American military officers who attempted to prevent said murder
in order to cover up his own ineptitude.
--- news://freenews.netfront.net/ - complaints: ***@netfront.net ---
1432239957
Hewlett-Packard Co.s upcoming breakup into two separate companies will
cost billionsbut there will be $1 billion in cost savings too, the
company said Thursday.
The storied Silicon Valley institution will formally divide into two
public companies by Nov. 1: HP Inc. will be the PC-and-printer company and
Hewlett-Packard Enterprise will sell business software, servers and
networking gear. H-P has said it would spend $1.8 billion in restructuring
and a further $950 million in taxes to accomplish the split.
In reporting earnings for the second quarter ended April 30, it warned of
another $400 million to $450 million in dis-synergy costs from
duplicating functions formerly handled by single departments.
Those come about as a result of having to replicate corporate functions:
Things like having to have two CFOs, two treasurers and two general-
counsels, said Cathie Lesjak, H-Ps chief financial officer.
H-P said it would incur an additional one-time charge of $1 billion in
connection with the separation. It also announced a further $2 billion in
restructuring costs in its Enterprise Services group. Toni Sacconaghi, an
analyst with Bernstein Research, said the latter expense most likely would
result from reducing head count. Thats a very significant incremental
set of workforce reductions. That will be tens of thousands of people.
But H-P would cut costs too, Ms. Lesjak said. As a result of the
separation, we think that there will be opportunities to find some cost
savings.
H-P didnt explain where the savings would come from.
Meanwhile, the company is struggling to boost revenue in a sluggish PC
market. It reported on Thursday a 7% drop in revenue for the quarter, hurt
by a strong U.S. dollar and declines in all the companys major segments.
It was the 14th decline, year-over-year, in the past 15 quarters.
Moreover, the company issued downbeat earnings guidance for the current
quarter.
H-Ps PC group was hit harder than expected, with revenue down 5%. The
software group was no healthier, down 8% year-over-year, as was enterprise
services, down 16%.
But Chief Executive Meg Whitman was able to point out some bright spots.
Sales of Intel-based serversa troubled business a couple of years
agowere up 11% year-over-year. The PC market was tough, but we gained
share in every region, in just about every product category, she added.
The companys earnings per share of 87 cents, excluding certain items,
beat expectations, and H-P maintained its outlook for the year. Shares of
H-P, which were off 16% for the year as of Thursdays market close, rose
1.1% to $34.21 in after-hours trading. Net income fell to $1.01 billion
from $1.27 billion.
The company will lay out the financial details of the two new H-Ps, both
of which are due to rank as Fortune 50 companies, in SEC documents
expected to be filed in July. H-P is dividing up the companys staff of
300,000, real estate at 600 locations and a Gordian knot of 2,700
information-technology systems in 170 countries. It has assembled a team
of several hundred employees to manage the massive task.
H-P spooked investor confidence in the split with its first-quarter
financial report, which cut earnings guidance and disclosed the $1.8
billion in restructuring costs.
But it looks as though the H-P split makes sense, Mr. Sacconaghi said. The
resulting companies will likely offer distinct value propositions, he
said, with HP Inc. driving dividends to investors and HP Enterprise being
an earnings-per-share growth pick.
Also on Thursday, H-P announced that Chinas Tsinghua Holdings Subsidiary
would spend $2.3 billion acquiring a 51% stake in a newly created business
comprising H-Ps H3C Technologies Co., a seller of networking hardware,
and H-Ps server, storage and support business in China.
The companys quarterly revenue of $25.5 billion fell below the $25.635
billion projected by Wall Street analysts. The company had warned that the
strong dollar would hurt results. The revenue decline was 2% on a
constant-currency basis, H-P said.
H-P said it expected per-share earnings excluding items of 83 cents to 87
cents for the third quarter. Analysts polled by Thomson Reuters had
projected 87 cents.
Josh Beckerman contributed to this article.
Write to Robert McMillan at ***@wsj.com
When HP attempted to lock users into HP service by restricting patches and
firmware downloads for crappy commodity Intel servers, this loss was
predictable, and it will get even worse this year no matter what they do.
Comments:
Frank Anderson 28 minutes ago
Has there ever been a non-bank that has destroyed more shareholder monies
than this group?
George TrebaolGeorge Trebaol 57 minutes ago
In my opinion, they should manage what they have as an integrated company
more effectively and not waste billions of investors' money trying in re-
invent themselves.
Gordon LairdGordon Laird 1 hour ago
Same page of same day of this journal; Scott McNealy is back. I could be
just remarkable coincidence, but the rational behind HP's latest move, has
Scott's fingerprints all over it.
--
Obama increased total debt from $10 trillion to $18 trillion in the six
years he has been in office.
The only American president to deliberately import a lethal infectious
disease from Africa, Ebola.
Barack Obama, reelected by the dumbest voters in the history of the United
States of America.
Loretta Fuddy, killed after she "verified" Obama's phony birth
certificate.
Nancy Pelosi, Democrat criminal, accessory before and after the fact to
improper vetting of Barry Soetoro aka Barack Hussein Obama, a confirmed
felon using SSAN 042-68-4425, belonging to a dead man.
Obama ignored the brutal killing of an American diplomat in Benghazi, then
relieved American military officers who attempted to prevent said murder
in order to cover up his own ineptitude.
--- news://freenews.netfront.net/ - complaints: ***@netfront.net ---