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Hewlett Packard Just Reported Its Worst Revenue Since 2007: This Is How It "Beat"
If you are the Hewlett-Packard CFO and you know you are about to miss badly on your revenue, which incidentally at $25.5 billion will not only be a 7% drop from the prior year's topline and below the $25.7 billion expected, but will also be the worst revenue since July 2007 and on top of that, your Q2 GAAP EPS of $0.55 will will miss lower end of the previously provided range of $0.57 -$0.61, what do you do? Why you fudge your non-GAAP EPS as much as you possibly can.
So much so, that while missing your own GAAP outlook your non-GAAP EPS of $0.87 lands in the upper end of the $0.84-$0.88 range you provided!
How is it that the company's GAAP EPS declined by a whopping 17%, from $0.66 to $0.55, and yet its non-GAAP EPS dropped by a tiny 1% from 0.88% to 0.87%?
This is how:
Non-GAAP diluted net EPS exclude after-tax costs of $585 million and $0.32 per diluted share, respectively, related to separation costs, restructuring charges, the amortization of intangible assets and acquisition-related charges.
In other words, because the business is doing progressively worse, it will get full credit for all these non-GAAP addbacks, which make it seem that neither revenue nor actual operations cratered!
But don't worry, while Hewlett admits the organic contraction will continue and Q3 EPS will decline even more, this time to a range of $0.50-$0.54 or down 13% from the current quarter guidance (which the company will surely miss once more) its non-GAAP EPS will be virtually unchanged at $0.83-$0.87!
And that is non-GAAP data fabrication magic front and center right there.
Oh, and just in case someone asks about that all important metric which no amount of seasonal-adjustments or GAAP fabrication can adjust, actual cash flow, here it is: "HP generated $1.5 billion in cash flow from operations in the second quarter, down 51% from the prior-year period."
Oops.
The collapse in cash flow generation however did not prevent the company from "utilized $659 million of cash during the quarter to repurchase approximately 19.0 million shares of common stock in the open market."
In fact, as the following chart shows, in the LTM Period, HPQ has spent just about the same amount on stock buybacks as it has on capital expenditures.
Is there any wonder then why HPQ's revenue is constantly crashing, and has now dropped to the lowest level in 8 years?!
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guess it wont be HPQ dividends driving the "economic engine" ... what does HP even make anymore?
http://hedgeaccordingly.com/2015/05/goldman-dividends-could-be-sole-cont...
Nothing, dont need to make anything as long as you are listed on the NYSE they will buy your stock, you are part of the ponzi game!
Very expensive ink cartridges for cheap ass printers
I'm pretty sure I talked with a guy who worked for HP and was in the financial division which is a big chunk of the company. I really wonder how much regular businesses have cashed in on financials. Building real shit is for chumps I guess.
Who cares it up 4% AH
Moar!
Sell Bonds. Issue Dividends. Make the 10:30 tee-off.
Done!
HP is a dinosaur waiting to be extinct. The company is going to blow up with record amount of their own buy back shares. I give it 5 years.
Meg resembles a broken down Hillary Clinton. Meg is still running HP like it's a product to sell on Ebay.
http://www.usatoday.com/story/tech/2015/05/21/hewlett-packard-meg-whitma...
Meg, I love HP. Only you are selling off the product image. Shame on you. I would fire you if on the board of directors.
They obviously need to bring back Carly Fiorina.
/sarc
Beat me to it. Perhaps we get a Fiorina/Whitman or a Whitman/Fiorina ticket in 2020.
Actually, she did better than the CEOs after her.
A lot of GOBs didn't like her, that's all.
Bring back Carly. I'm sure Meg will be getting a golden parachute once everything tanks.
congress allows companies to expense stock options but won't allow students to deduct the interest costs of the money they borrow for their education. That's America today.
David Packard and William Hewlett were the geniuses of this company. Meg is a sap who is selling out a pioneering icon business. H3C? Fuck you Meg. Start packing your personal office items.
They should start building descent equipment again rather than the cheap shit that they are flogging now.
I went to the HP 3000 computer school in Cupertino years ago. The HP 3000 was a reliable 'tank' of a computer! The stuff they are putting out now - no comment.
I have been working in and with PCs since the 286.
HP was a classic case of kill yourself for control. At first they put out fine machines at a decent price point, then got all greedy and started dropping the quality, and installing crapware and malware--taking control of the customer's PC. In the mean time, people like me started making a bundle selling reliable machines for half the price. Their support and service went to hell as well. They were cutting support, while their crapware was causing more calls to support. That little foot-shooting garnered me many a client.
I would get a call from a frustrated HP customer, swoop in and install a replacement, and get them back up. Then while they were amazed, get a service contract, and bam, adios HP.
As for my PCs. I used standard PC parts, and so always had parts and/or a PC up and ready to be taken and dropped into place at a client's site. If a PC went bad, I'd replace the part or PC, install an image, makes some mods, and done--4 hours tops from "call to up." If the part was out of warranty, I'd usually tell the client, "don't worry about it," as they had a service contract with me. In the mean time HP and Dell would be charging 2 to three times the retail cost of a part that was out of warranty.
Thanks HP, Dell, IBM, Compaq, and Gateway--you were the best partners a business could have.
Liberty is a demand. Tyranny is submission..
I used to have clients call HP and/or Dell and get a server and/or workstation quote. I'd then beat it by 25%, and still make 50% margins. I once got an $18,000 server, workstation, and network install where HP wanted $32,000 just for the HARDWARE. Yes, over 50% margins on that little deal. Signed the contract, called the wife and asked her where she would like to go on vacation in 6-weeks. Thanks HP.
Kchrisc, that is fucking awesome !!
Maverick
Well I don't know if you are retired now, but most of these servers don't go for $30k anymore, or at 50% margins.
Meg, don't expect a golden parachute. Bonuses are based on value to shareholders and customers. You Failed.
Your just another feminist breaking the glass ceiling. You haven't driven this company into new innovative expectations. What you did, look I'am a woman who is a CEO of HP collecting a Hugh paycheck. I can ship my business interest off to China to make more money. Who cares about new technology, we can make up profits by outsourcing the same shit we unveil from previous years.
I used to love when Whitman was talking on CNBC and the EBAY stock ticker would be in the background. The chart would immediately start going down, down, down....It was classic. The second she opened her mouth.
But, but Carly Fiorina was to blame. Oh, wait, maybe it's Meg now.
A question, related to my, and many others', idea that the dollar is up on "exit," and that the markets are now being manipulated to cover the "exit."
Whose stock is being bought in these so-called "buy backs?" Seems to me that the few retail investors left and pension funds will be left to stomp out the flaming bag of shit that is left over, while the connected and Amongst snicker from across the "pond."
Liberty is a demand. Tyranny is submission..
But then my tin-hat hasn't been as snug fitting as in the past.; It's been letting stray signals in. "Na-Nu Na-Nu"
My HP boycott is working. I'm dismayed at what the company has become.
Say goodbye Meg, and please don't run for political office again.
Would like to see Meg mud wrestle Carly.
I hope there is no NSA in my printer.
Is Your Printer Spying On You?
To improve revenue, they need to eliminate the rest of the US employees, and replace them with even moar from Bangalore.
The only Americans left these days are in one or more of the PC demographic groups (female, black, GLBT, Asian-American). If they are White, chances are they are Jewish or Mormon. Whites of European ancestry are a minority or an Endangered Species, and the most likely to get whacked at each successive wave.
No more Kaptn Kirk for sure
Reporting was a silly dog and pony show before SEC suspended GAAP accounting standards (beating the number akin to shooting an arrow and drawing a bullseye around it. Bulls eye every time!). Since the GAAP suspension reporting as virtually lost all meaning.
No wonder I got a call from them yesterday asking me to please buy something! We are a tiny operation and I've only bought four or five bare bones cheap ass servers off them in the past ten years. If they are that far down on their customer list, the begging for business must not be going well.