HP posts Q3 2012 fiscal results, brings in $29.7 billion in revenue, loses billions on paper
Hewlett-Packard today posted their results for the third quarter of 2012, raking in $29.7 billion in revenue, but still posting a loss of $8.9 billion. That $8.9 billion includes an already announced only-on-paper $8 billion write down on EDS plus a few billion more thanks to depreciation of the Compaq brand, so for the May-July period of this year HP netted a profit of $2 billion.
The $29.7 billion in revenue was more than expected, but is a drop in 5% from the year prior. That said, last year's earnings announcement landed right as HP announced CEO Leo Apotheker's plan to split HP into two, along with killing off webOS hardware development. The $8.9 billion (or $900 million, depending on how you want to slice it) loss is a significant swing from last year, when HP netted a profit of $1.9 billion. HP's earnings have declined from the year prior every quarter of the past year, though the combined $10.8 billion in write downs artificially depressed this quarter's earnings.
So while nearly $11 billion in paper losses is a bad thing, the outlook for the coming quarters is even worse. Personal Systems Group, which is responsible for a large chunk of the revenue ($8.6 billion) but only $409 million in profit, saw revenue and earnings from the same quarter last year drop by 10%, with no bottom in sight as desktop unit shipments dropped 6% and laptops 12%. Imaging and Printing saw earnings drop but profits rise, but future results will see those earnings merged with PSG as the new Printing and Personal Systems Group under Todd Bradley.
CEO Meg Whitman painted, as expected, an optimistic picture for the future of HP, saying that, "HP is still in the early stages of a multi-year turnaround, and we’re making decent progress despite the headwinds." Headwinds being the destruction of significant value in the Compaq and EDS brands, a likely upcoming multi-billion dollar write down from the Autonomy purchase (even with revenue increasing by 18%), and the continuing decline of HP's computer unit at the hands of mobile computing (wouldn't webOS be useful now?) and enormous pressure on the flagship printing unit thanks to, well, people not printing anymore. But as Whitman makes clear, the quarterly report isn't everything, HP's focusing on the long-term picture.