HP chief executive officer Meg Whitman is expecting IT market revival though the enterprise IT vendor posted 1 percent dip in first quarter revenue to $28.2 billion from the prior-year period.
Reuters reported that HP saw corporations and agencies beginning to replace ageing computers in the quarter, while Microsoft’s decision to soon end support for its Windows XP operating system also prompted PC upgrades.
Whitman was upbeat on HP’s European business as the developed part of that region stabilized, and she said she saw strength in emerging markets like India and Mexico. She added that HP’s business in China stayed largely flat, better than competitors had fared.
Cisco CEO John Chambers earlier said the enterprise networking vendor is facing unprecedented pressure in the China market on account of the U.S. federal government’s alleged role in spying initiatives that rocked the entire world.
Cisco Systems, a rival in networking equipment, forecast a 6 percent to 8 percent decline in revenue this quarter.
HP has battled IBM as well as Dell and China’s Lenovo in trying to win business from enterprises migrating to the cloud, or remote computing services.
Whitman said Lenovo’s purchase of IBM’s low-end server division presented an opportunity for HP to try and win market share, especially in the near term, given that customers tended to avoid uncertainty about a supplier’s product roadmap.
HP business performance
Personal Systems revenue grew 4 percent year over year with a 3.3 percent operating margin. Commercial revenue increased 8 percent and Consumer revenue declined 3 percent. Total units were up 6 percent with Desktops units down 3 percent and Notebooks units up 5 percent.
Printing revenue dipped 2 percent with a 16.8 percent operating margin. Total hardware units were up 5 percent with Commercial hardware units up 6 percent and Consumer hardware units up 4 percent. Supplies revenue was down 3 percent.
Enterprise Group revenue rose 1 percent with a 14.4 percent operating margin. Industry Standard Servers revenue grew 6 percent, Storage revenue was flat, Business Critical Systems revenue dipped 25 percent, Networking revenue increased 4 percent and Technology Services revenue fell 4 percent.
Enterprise Services revenue decreased 7 percent with a 1 percent operating margin. Application and Business Services revenue was down 4 percent, and Infrastructure Technology Outsourcing revenue declined 9 percent.
Software revenue declined 4 percent with a 15.8 percent operating margin. Support revenue was down 2 percent, license revenue was down 6 percent, professional services revenue was down 12 percent and software-as-a-service (SaaS) revenue was up 6 percent.
HP Financial Services revenue decreased 9 percent with a 6 percent decrease in net portfolio assets and an 18 percent increase in financing volume. The business delivered an operating margin of 11.6 percent.
