HP Reports $9 Billion Loss

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Yikes! A nine billion dollar loss? Where is that Mark Hurd guy when you need him? ;)

"HP is still in the early stages of a multi-year turnaround, and we're making decent progress despite the headwinds," Meg Whitman, HP president and CEO, said in an earnings release. "During the quarter we took important steps to focus on strategic priorities, manage costs, drive needed organizational change, and improve the balance sheet. We continue to deliver on what we say we will do."
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Didn't they also report a $29.7 Billion revenue average as well? I mean $9 Billion is a major loss but it sounds like despite the awful board and CEO they may be stepping in the right direction finally.
 
not very good but also not as bad as the report may seem. Looking at the 8k SEC filing as of the 22nd (today) they took a write-down under Cost and Expenses of 9.2, under the heading "Impairment of goodwill and purchased intangible assets". To undo MBA speak, they basically wrote down some acquisitions as worth 0, thus making their asset sheets look good because its not a case of "hey look what we bought" which is what brought down worldcom and Enron. They are actually practicing corporate reality check on what their stuff is worth.

What would concern me as an investor is something else. On a fundamental level they are shrinking.
Business Group Results

● Personal Systems Group (PSG) revenue was down 10% year over year with a 4.7% operating margin. Commercial revenue decreased 9%, and Consumer revenue declined 12%. Desktop units were down 6%, notebook units were down 12% and total units were down 10%.
●
Imaging and Printing Group (IPG) revenue declined 3% year over year with a 15.8% operating margin. Commercial hardware revenue and units were up 4% year over year. Consumer hardware revenue was down 13% year over year with a 23% decline in printer units.
● Services revenue declined 3% year over year with an 11.0% operating margin. Technology Services revenue was down 1% year over year, Application and Business Services revenue was flat, and IT Outsourcing revenue declined 6% year over year.
● Enterprise Servers, Storage and Networking (ESSN) revenue declined 4% year over year with a 10.9% operating margin. Networking revenue was up 6%, Industry Standard Servers revenue was down 3%, Business Critical Systems revenue was down 16%, and Storage revenue was down 5% year over year.
● Software revenue grew 18% year over year with an 18.0% operating margin, including the results of Autonomy. Software revenue was driven by 2% license growth, 16% support growth, and 65% growth in services.
● HP Financial Services revenue was flat year over year as the 2% increase in net portfolio assets was offset by a 2% decrease in financing volume. The business delivered a 10.4% operating margin.
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only HP software is growing, everything else is going down my small percentages.
 
$9 billion...for the third quarter alone. They made $2 billion in the second quarter. That's an $11 billion swing, from quarter to quarter.
 
It's due to a non-cash writedown. This happens all the time in every sector. Anyone that knows anything about finance will just subtract out the non-cash loss and any tax advantage gained from the writedown. It does make you question their ability to value acquisitions and whether they tend to overpay though.

baldrik said:
$9 billion...for the third quarter alone. They made $2 billion in the second quarter. That's an $11 billion swing, from quarter to quarter.
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No.
 
"Where is that Mark Hurd guy when you need him?"

Hopefully at the bottom of a ravine in a burning BMW. Can you tell I'm not a fan? ;)

Hurd was a one trick pony, that one trick being cut everything. That works for a while, but how many companies have cut their way to success? After you've cut the deadwood, gutted everyone involved in product development and messed up service delivery beyond repair, you kind of end up in a death spiral. Not to worry, we're going to cut our way out of this. :rolleyes:

Don't mind me, little wound up after spending yet another afternoon trying to teach a project manager, project management (and English) during a client-facing meeting. Hurray for best shoring project management to South America. Goes well with offshored problem management that reminds of that Hungarian Phrasebook Sketch from Monty Python.
 
Unexploded said:
"Where is that Mark Hurd guy when you need him?"

Hopefully at the bottom of a ravine in a burning BMW. Can you tell I'm not a fan? ;)

Hurd was a one trick pony, that one trick being cut everything. That works for a while, but how many companies have cut their way to success? After you've cut the deadwood, gutted everyone involved in product development and messed up service delivery beyond repair, you kind of end up in a death spiral. Not to worry, we're going to cut our way out of this. :rolleyes:

Don't mind me, little wound up after spending yet another afternoon trying to teach a project manager, project management (and English) during a client-facing meeting. Hurray for best shoring project management to South America. Goes well with offshored problem management that reminds of that Hungarian Phrasebook Sketch from Monty Python.
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my sister described much the same. you can only cannibalize so much before it becomes self defeating. she was finally laid off about 18 months ago and was almost revealed.
 
Well that's ironic there's 9 billion bytes in their godawful printer drivers.
Also their laptops are terrible.
Make better products instead of nonsense like "focus on strategic priorities, manage costs, drive needed organizational change, and improve the balance sheet".
 
DarthCleric said:
not very good but also not as bad as the report may seem. Looking at the 8k SEC filing as of the 22nd (today) they took a write-down under Cost and Expenses of 9.2, under the heading "Impairment of goodwill and purchased intangible assets". To undo MBA speak, they basically wrote down some acquisitions as worth 0, thus making their asset sheets look good because its not a case of "hey look what we bought" which is what brought down worldcom and Enron. They are actually practicing corporate reality check on what their stuff is worth.

What would concern me as an investor is something else. On a fundamental level they are shrinking.


only HP software is growing, everything else is going down my small percentages.
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What brought down Enron and Worldcom was not just "hey look what we bought," it was extremely unethical revenue recognition among other things with the help of Arthur Anderson to hide it all. Impairment of goodwill just shows that formerly purchased assets are not worth what they were holding it on the books for. A large write down like this is questionable, I'd like to read the notes if I get a chance to see why.
 
HP proves that CEOs of huge companies are no smarter than the average guy on the street. A WebOS tablet was idiotic. People don't want yet another OS. Buying Compaq was foolish. It's pointless to by company in competition with you when there are a lot of companies in competition with you.

BTW: HP has been selling laptops cheap. I don't know if they're trying to reduce bloated inventory or if this is BS to pump up revenue numbers by giving up profit margin. It makes me wonder what kind of other short-signed stuff HP might be up to.
 
Valset said:
my sister described much the same. you can only cannibalize so much before it becomes self defeating. she was finally laid off about 18 months ago and was almost revealed.
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Seems to be a common theme (being relieved you've finally been voted off the island). I've heard the same thing from about half the friends who've been packaged out over the last decade or so. Sucks for a while, but once you (hopefully) find another gig without the fear of arbitrarily being axed, you start wondering how you ever put up with it. Kind of reminds me of working sales. Where even if you make good money in a month, you're always afraid to spend it, cause who knows what next month will bring.

I do appreciate the working from home thing, that's one of the main reasons I'm still here. Not a lot of offices around here that will let you setup a treadmill at your desk and it's nice to hang out with the dogs during the day.

Well, that, and a weird desire to see what new form of madness they roll out next. :D
 
Steve said:
Yikes! A nine billion dollar loss? Where is that Mark Hurd guy when you need him? ;)
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You think that's bad?

Wait until AFTER Windows 8 hits.

Companies like Dell that are relying on Windows 8 to move systems will likely have financial reports that will make this look like chump change.

HP at least seems to be taking the correct steps to stay market-relevant, like pulling in Alberto Torres to run a newly formed consumer product branch of the personal systems group.

HP also managed to secure a court victory forcing Oracle to honor the Itanium contract, which should staunch the bleeding on some of HP's niche server market needs. Granted Itanium is a dead-end anyways, but forcing Oracle back on board with all of Oracle's products will certainly keep vendors using Itanium from scampering off to Xeon, Opteron, or clustered ARM for a few more years.

Now as far as your joke about Mark Hurd maybe being useful?

Well, do keep in mind where Mark Hurd is at. He's now at Oracle...

which bought Sun Microsystems on the hopes of a megapayout on Android From Google... which didn't happen...

which broke contract with HP on the hopes that no court would ever decide there was a contract... which didn't happen...

burned the bridges with Red Hat over Unbreakable Linux:: All but one of Red Hat's big-contracts that switched from Red Hat to Unbreakable have gone back to Red Hat...

burned the bridges with Open-Office:: Libre-Office is now the default standard and OO has been shoved off to Apache

So... yeah. No particular reason to think that Mark Hurd is a magic genie.
 
WOW misleading much in the title? At least read through the details and you would know that they would have had a $2 billion net income if it wasnt for the writedown...
 
HardOCP... you guys are smarter than this. Hurd was awful for HP. The only think to see here is that HP overpaid for EDS.
 
Saist said:
You think that's bad?

Wait until AFTER Windows 8 hits.

Companies like Dell that are relying on Windows 8 to move systems will likely have financial reports that will make this look like chump change.
Click to expand...

Sure they will on both counts.

Or if you look at the history of computers. PC and laptop sales will continue to happen, not a whole lot will change and people if they like Windows 8 will be happy, and people who don't will compare it the version of Windows they hated the most, say its going to be the downfall of Microsoft and the IBM compatible PC all the while Windows 8 is making billions of dollars a quarter and Dell's and HP's are still selling.

HP is sucking because all of their products on every level are stale. Many of their designs have the same look they did 5-6 years ago, and those unlike lets say Apple, don't scream awesome quality.
 
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