All businesses and regions post sequential revenue growth
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AMAZING! suite101.com
Too bad they had to downsize to get these results, but the results are what were promised... even better.
It looks like Carly has learned the "HP Way - under promise and over deliver"
HP Reports 4th Quarter 2002 Results
Wednesday November 20, 4:03 pm ET
PALO ALTO, Calif.--(BUSINESS WIRE)--Nov. 20, 2002--HP (NYSE:HPQ - News)
-- Revenue of $18 billion, up 9% sequentially
-- All businesses and regions post sequential revenue growth
-- Strong gross margin improvement
-- Significant sequential operating profit improvement in
Enterprise Systems, Personal Systems, HP Services and Imaging
and Printing
-- Solid sequential improvement in channel inventories overall
-- Pro Forma EPS $0.24; GAAP EPS $0.13
-- Meeting or exceeding integration targets
-- Affirms current Q1 consensus estimates
HP (NYSE:HPQ - News) today reported financial results for its fourth fiscal quarter ended Oct. 31, 2002. The company reported fourth quarter revenue of $18.0 billion, compared to $16.5 billion in the prior quarter. Sequentially, revenue increased 9%, while pro forma gross margin increased from 25.7% to 26.6%. GAAP gross margin increased from 24.9% to 26.5%.
Pro forma operating expenses as a percent of revenue were down sequentially from 22.5% to 21.7% of net revenue, reflecting progress in merger-related value-capture savings, which were offset in part by costs for the employee performance bonus program, provisions for bad debt, increased R&D and marketing expenditures in the Imaging and Printing segment and currency effects. GAAP operating expenses as a percent of revenue were down sequentially from 39.9% to 24.1% of net revenue, primarily as a result of higher one-time charges for restructuring, in-process research and development and merger-related charges in the prior quarter.
Pro forma earnings per share (EPS) for the quarter was 24 cents, compared to 14 cents in the third quarter and 8 cents in the year-ago period on a combined company basis. (1) This represents a pro forma net earnings improvement of 72% sequentially and 203% year over year. GAAP net earnings before extraordinary items improved 364% year over year.
Reported GAAP EPS was 13 cents per diluted share, versus a loss of 67 cents last quarter and a loss on a combined company basis of 17 cents in the year ago period. Pro forma EPS reflects a $331 million adjustment on an after-tax basis, or 11 cents on a diluted per share basis. The pre-tax pro forma adjustment includes a $150 million restructuring charge; $151 million of amortization of goodwill and purchased intangible assets; and $155 million for other merger-related items.
"We are proud of our progress," said Carly Fiorina, HP chairman and chief executive officer. "We delivered solid results in a tough market. The HP team is executing, customers are responding and we're beginning to deliver on the promise of the merger. We feel good about our trajectory."
"HP's revenue grew sequentially in every business and in every region," Fiorina stated. "Operating profit improved sequentially in Enterprise Systems, Personal Systems, HP Services, and Imaging and Printing. Cost structure improvements are helping us compete more aggressively, improve our market position and grow top line revenues; and HP generated $1.5 billion in cash from operations in the quarter."
Personal Systems cut its operating loss by more than 50 percent sequentially, continued to make progress in direct distribution, stabilized the channel with HP's new partnerONE program, grew sequentially in both consumer and commercial PCs, managed channel inventories lower, and reinforced the company's leadership in innovation with successful new product launches.
Enterprise Systems showed solid revenue and profit improvement in a weak IT market with quarter-over-quarter growth in every region and in every business unit, reducing operating losses by more than 60% sequentially. HP Services returned to double-digit profitability in the quarter and posted continued good growth in managed services. Meanwhile, Imaging and Printing posted another record quarter with double-digit sequential growth in revenue and profit in every region, and revenue and share gains across all businesses.
HP's 30 largest new business contracts in the quarter - with an average value of more than $120 million each - represent more than $3.7 billion in new long-term revenue.
"Six months into the merger, HP has completed the alignment of our global sales force with a single compensation plan, met or exceeded all integration targets, introduced over 100 new products, added roughly 1,400 patents to our worldwide patent portfolio of over 17,000 patents, introduced comprehensive three-year product roadmaps and managed complex product transitions - all while relentlessly focusing on customers," Fiorina said.
"We're cutting costs, boosting productivity, delivering more for our customers and shareowners, and investing in the future. Our strategy is working and we're picking up momentum," Fiorina stated.
Merger related cost savings for the second half of 2002 were $651 million, 30% above plan. The company completed 12,500 net workforce reductions in the half, 25% above plan. Of the $651 million of merger-related costs savings, $257 million came from workforce reductions, $243 million from direct and indirect procurement savings, and $151 million from other savings, including marketing program cuts and facilities closures in conjunction with our restructuring plans. The company continues to target $3.0 billion of total cost savings. The company is on track to meet 17,900 targeted job reductions by the end of fiscal 2003, in part due to an additional 1,100 positions that are part of a voluntary workforce reduction primarily in Japan in the fourth quarter of fiscal year 2002.
Summary of Combined Company Financial Resultshttp://biz.yahoo.com/bw/021120/200415_1.html |
