HP misses on Q4 earnings targets on first post-split report

HP stipulated in Tuesday's report that the fourth quarter results include HP Enterprise businesses despite the split.
Written by Rachel King, Contributor

Fresh off the company split, Hewlett Packard published fourth quarter financial results after the bell on Tuesday, and results were all over the map.

The tech giant reported a net income of $1.3 billion, or 73 cents per share (statement).

Non-GAAP earnings were 93 cents per share on a revenue of $25.7 billion, down nine percent year-over-year.

Wall Street was looking for earnings of 97 cents per share with $26.36 billion in revenue.

After months in the making, the plan to split the beleaguered Hewlett Packard into two separate entities finally happened on November 1, dividing the legacy brand into Hewlett Packard Enterprise and HP Inc., a consumer-focused business for PCs and printers.

HP Enterprise began trading on the New York Stock Exchange under the ticker symbol "HPE" on November 2. HP Inc. retained the "HPQ" symbol on the same trading floor.

However, HP stipulated in Tuesday's report that the fourth quarter results encompass both HP Inc. and HP Enterprise businesses prior to October 31.

A primary focus for HP Inc. in the long run will be 3D printing while HPE is recovering from massive layoffs and other cost cutting measures as it tries to bring its cloud portfolio up to par against the likes of Microsoft, Amazon and IBM.

Still, both sides of HP have work cut out for them as five out of six of HP's original core groups (Personal Systems/PCs, Printers, Software, Enterprise Services and Financial Services) all saw revenue slump during the quarter.

Only the Enterprise Group, which includes servers and networking, saw a slight uptick of two percent higher revenue on an annual basis.

Nevertheless, Meg Whitman, CEO for HP Enterprise and chairman for HP Inc., boasted HP Enterprise is off to a "very strong start."

"The new company's business segments delivered a second consecutive quarter of constant currency revenue growth in Q4, and we believe that momentum will accelerate into FY16," Whitman wrote in prepared remarks.

HP Inc. CEO Dion Weisler appeared more cautious in his remarks while defending HP's strategy.

"In these challenging markets, we are taking decisive actions that will protect our core business which generates the majority of our cash flows," Weisler said.

Looking forward to the fiscal first quarter of 2016, HP Inc. projected to deliver non-GAAP earnings between 33 and 38 cents per share. For fiscal 2016 overall, HP offered a range between $1.59 and $1.69 per share.

HP Enterprise offered its own Q1 range of 37 to 41 cents per share with the goal of $1.85 to $1.95 a pop at the end of the year.

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