HP Reports Revenue, Earnings Increases

PALO ALTO, CA—Feb. 22, 2011—HP announced financial results for its first fiscal quarter ended Jan. 31, 2011. Net revenue of $32.3 billion was up 4 percent from the prior-year period in constant currency, and GAAP net earnings totaled $2.6 billion, up 16 percent.

Revenue was up 6 percent in the Americas to $14.4 billion and up 7 percent in Asia Pacific to $5.8 billion. Revenue was flat in Europe, the Middle East and Africa at $12.1 billion. When adjusted for the effects of currency, revenue was up 5 percent in the Americas, up 4 percent in Europe, the Middle East and Africa and up 2 percent in Asia Pacific.

Business group highlights

• Imaging and Printing Group (IPG) revenue grew 7 percent year over year with a 17.0 percent operating margin. IPG delivered strong performance across the business with share gains in all printing categories and 33 percent year-over-year growth in commercial printer hardware units. The group continued to drive innovation and momentum with the new ePrint platform, graphic arts and other commercial print solutions.

• Personal Systems Group (PSG) revenue declined 1 percent year over year with a 6.4 percent operating margin. PSG delivered record operating profit in the quarter and remains the PC market leader in terms of units, revenue and profit share. The commercial refresh cycle continues, and HP saw 11 percent year-over-year revenue growth in Commercial Clients while revenue in Consumer Clients declined 12 percent in the quarter.

• Services revenue declined 2 percent year over year with a 16.0 percent operating margin. Services operating margin expanded 30 basis points year over year due primarily to service delivery transformation efforts. Enterprise Services had solid long-term signings in the first quarter, the impact of which was partially offset by softer signings in shorter term, higher value-added services and add-on IT outsourcing projects.

• Enterprise Servers, Storage and Networking (ESSN) revenue grew 22 percent year over year with a 14.7 percent operating margin. ESSN delivered a solid quarter, demonstrating increased value to customers as they transition to hybrid cloud environments through a converged infrastructure, including innovations in servers, storage and networking.

• HP Software revenue grew 5 percent year over year with a 17.6 percent operating margin. HP Software expanded its security footprint with the integration of Fortify and ArcSight during the quarter.

• Financial Services revenue grew 15 percent year over year with a 9.6 percent operating margin. Financial Services growth was driven by both double-digit growth in lease volume and a healthy improvement in portfolio assets.

Outlook

For the second quarter of fiscal 2011, HP estimates revenue of approximately $31.4 billion to $31.6 billion. It expects full year fiscal 2011 revenue in the range $130 billion to $131.5 billion.

More information on HP’s quarterly earnings, including additional financial analysis and an earnings overview presentation, is available on HP’s Investor Relations website at www.hp.com/investor/home.

About HP
HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world’s largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services and IT infrastructure to solve customer problems. More information about HP is available at www.hp.com.

Source: Financial release.