Hewlett-Packard (NYSE:HPQ), the PC and printer company, reported declines in almost every business segment in its fiscal fourth quarter, underlining weaknesses as it prepares to split in two next year. Shares fell.
Total sales fell 2.5 percent to $28.4 billion in the quarter ended Oct. 31 from $29.13 billion a year earlier, the Palo Alto, California-based company said in a statement late yesterday. That missed analysts’ average projection for revenue of $28.8 billion.
Excluding items, net income declined 2.7 percent to $2.01 billion, or $1.06 per share, matching analysts' expectations.
Overall, net income dropped 5.7 percent to $1.33 billion, or $0.70 per share, from $0.73 per share a year ago.
Fourth-quarter sales in the PC unit climbed 4 percent from a year earlier, led by corporate demand, while sales in the printing group fell 5 percent.
Enterprise services revenue retreated 7 percent in the quarter, and enterprise group sales -- made up of products like servers and storage -- dropped 4 percent. The software and financial-services groups each reported a revenue decline of 1 percent.
PCs are in a transition of their own, with tablet computers, laptops and notebooks increasingly overlapping in quality and function.
The company said last month it would split into two listed companies next year, separating its computer and printer businesses from its faster-growing corporate hardware and services operations, and eliminate another 5,000 jobs as part of its turnaround plan.
"I've always said that turnarounds aren't linear," the company’s chief executive officer Meg Whitman told analysts on a conference call yesterday while highlighting HP's performance compared with three years ago, when she became CEO. "We're right where we thought we'd be."
When HP becomes two companies, Ms. Whitman will be chief executive of Hewlett-Packard Enterprise, and nonexecutive chairman of HP Inc., the PC company.
Looking ahead, the company said it expects full-year 2015 earnings to be $3.83 to $4.03 per share, up from $3.74 for 2014.
Shares were down 0.8 percent at $37.33 in premarket trades. The stock has rallied 34 percent so far this year.