PALO ALTO — In a last hurrah that failed to impress Wall Street, Hewlett-Packard turned in its final earnings report Tuesday with results that fell below expectations.
The Palo Alto computer giant, which split into two companies at the beginning of November, reported fourth-quarter earnings of 93 cents a share on revenue of $25.7 billion. Revenue was down 9 percent from the 2014 fourth quarter. The results exclude some one-time expenses.
The numbers were below the 97 cents a share on $26.36 billion in revenue that analysts expected. Fully reported earnings were 73 cents a share.
Fiscal year revenue was $103.4 billion, down 7 percent from the previous year.
The results were not a complete surprise, as the venerable technology company has been engaged in a four-year turnaround effort to meet challenges from upstart companies in a traditional data center and storage environment that is being changed by cloud computing.
“The Street was not expecting fireworks,” said Daniel Ives with FBR Capital Markets. “This is another indicator of hurricane-like headwinds facing these traditional tech stalwarts” like Hewlett-Packard, Cisco Systems, Oracle and others, he said.
This is the old HP’s final turn on the financial stage — from now on, it will be two companies, HP Inc., which makes printers and personal computers, and Hewlett Packard Enterprise, which sells technology to businesses.
HPE CEO Meg Whitman and HP Inc. CEO Dion Weisler joined in a conference call to talk about their companies’ prospects.
Whitman said HPE’s “innovation engine is humming” and the company’s hybrid cloud and data analytics offerings are “dead-on” with what customers want. “We feel good about our ability to continue transformation to being a solutions company,” Whitman said.
The company has been able to snag some of IBM’s former server business customers. IBM sold its server business to Lenovo last year, she said.
HPE is dropping its so-called public cloud business to focus on selling a hybrid of traditional data center technology and private clouds, which are behind a client’s firewall instead of on an outsourced server. For that, it has formed a new partnership with Microsoft’s Azure public cloud business. “Microsoft will become a preferred partner” for the public cloud, Whitman said. In after-hours trading, HPE stock was up 2.6 percent to $14.05.
The other half of the old technology giant, HP Inc., is facing a declining market for personal computers and printers, but its new CEO, Dion Weisler, was upbeat on the future. Its stock dropped 7.45 percent to $13.55 in after-hours trading.
In PCs, he said, “innovation and sprinkles of magic” are key. He noted two new partnerships with Disney and Lucasfilm.
Still, “we expect the PC market to remain challenged for more quarters to come,” Weisler said.
Contact Pete Carey at 408-920-5419. Follow him at Twitter.com/petecarey.
