HP announced financial results for its first fiscal quarter ended Jan. 31, 2013. First quarter earnings per share (EPS) was 63 cents, down from 73 cents in the prior-year period and above its previously provided outlook of 34 to 37 cents per share.
For the first quarter, net revenue of $28.4 billion was down 6% year over year and down 4% when adjusted for the effects of currency.
Meg Whitman, (President and CEO, HP): While there’s still a lot of work to do to generate the kind of growth we want to see, our turnaround is starting to gain traction as a result of the actions we took in 2012 to lay the foundation for HP’s future.
For the second quarter of fiscal 2013, HP estimates EPS to be in the range of 38 to 40 cents. For the full year fiscal 2013, HP estimates EPS to be in the range of $2.30 to $2.50, in line with HP’s previously communicated outlook.
HP generated $2.6 billion in cash flow from operations in the first quarter, up 115% from the prior-year period. Inventory ended the quarter at $6.4 billion, with days of inventory down 2 days year over year to 26 days.
Accounts receivable of $14.2 billion was down 3 days year over year to 45 days. Accounts payable ended the quarter at $11.7 billion, flat from the prior-year period at 48 days.
HP’s dividend payment of $0.132 per share in the first quarter resulted in cash usage of $258 million. HP also utilized $253 million of cash during the quarter to repurchase approximately 19.2 million shares of common stock in the open market. HP exited the quarter with $13.1 billion in gross cash.
First Quarter Fiscal 2013 Segment Results
Personal Systems revenue was down 8% year over year with a 2.7% operating margin. Commercial revenue decreased 4%, and Consumer revenue declined 13%. Total units were down 5% with Desktops units up 10% and Notebooks units down 14%.
Printing revenue declined 5% year over year with a strong operating margin of 16.1%. Total hardware units were down 11% year over year. Commercial hardware units were down 6% year over year, and Consumer hardware units were down 13% year over year.
Enterprise Group revenue declined 4% year over year with a 15.5% operating margin. Networking revenue was up 4%, Industry Standard Servers revenue was down 3%, Business Critical Systems revenue was down 24%, Storage revenue was down 13% and Technology Services revenue was down 1% year over year.
Enterprise Services revenue declined 7% year over year with a 1.3% operating margin. Application and Business Services revenue was down 9% year over year, and IT Outsourcing revenue declined 6% year over year.
Software revenue was down 2% year over year with a 17.0% operating margin. Support revenue was up 11% while license revenue was down 16% and services revenue was down 8% year over year.
HP Financial Services revenue grew 1% year over year as a 1% increase in net portfolio assets was offset by a 25% decrease in financing volume. The business delivered a 10.6% operating margin.