HP sees quarterly profit drop 91%

Shutting down WebOS business costs HP $3.3bn

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HP sees quarterly profit drop 91% HP saw revenues rise in Software, Services and Financial Services, but decline in enterprise and PSG.
By  Mark Sutton Published  November 22, 2011

HP saw its profits for the fourth quarter fall by 91% as it absorbed the cost of closing down its WebOS business.

GAAP net earnings were $200m, against $2.5bn in the same quarter last year. Revenue for the quarter was down 3% to $32.1bn.

Profits for the full financial year, to end of October 2011 were down 19%, to $7.1bn, against $8.8bn in 2010, although revenue was up 1% to $127.2 billion.

The WebOS business, acquired in April 2010, will be closed down at a cost of $3.3bn.

"HP has a great opportunity to build on our strong hardware, software, and services franchises with leading market positions, customer relationships, and intellectual property," said Meg Whitman, HP president and chief executive officer. "We need to get back to the business fundamentals in fiscal 2012, including making prudent investments in the business and driving more consistent execution."

"While FY11 proved to be a challenging year, we grew non-GAAP EPS 7% and generated $12.6 billion in cash flow from operations," said Cathie Lesjak, HP executive vice president and chief financial officer. "We're remaining cautious heading into FY12 but are focused on delivering our earnings outlook and driving shareholder value."

For the EMEA region, HP reported GAAP revenue of $11.7 billion, down 6% year-over-year.

Among individual business units, revenues for HP Services, Software and Financial services were all up, by 2%, 28% and 18% year-on-year respectively, while the hardware oriented  Enterprise Servers, Storage and Networking (ESSN) was down 4%, Imaging & Printing Group (IPG) down 10% and Personal Systems Group (PSG) revenue down 2%.

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