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Slideshow: Ten take-aways from HP's Q4 earnings

Chief executive Meg Whitman talks the channel.

By Staff Writers on Dec 2 2013, 5:30PM

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Turnaround on track

HP CEO Meg Whitman says she is pleased with the company's progress as it closed out its fourth fiscal quarter with better-than-expected results. Here are 10 things to take away from Whitman on the quarter based on an interview with CRN US and a conference call with Wall Street analysts.

HP's channel is gaining momentum

"The channel is gaining strength for HP. We had a pretty good PC quarter given the [PC] market decline. Effectively, it was flat with particular strength in commercial PCs. This is where we saw real strength in the channel. I would say our PC and printing business in the channel was very strong. And we are making progress in the Enterprise Group. More work to do, but we are making progress there. I feel like the channel is moving along in the direction that we very much hoped it would go. And I think that is the result of the work we have put in and, frankly, the channel's belief in HP."

Good overall progress in fiscal 2013

"With the final quarter of our fix and rebuild year now behind us, I am pleased with our progress in fiscal 2013. As we said when we laid out our five-year plan, we expected that our turnaround would not be linear and we saw that during the year. However, as I reflect on the key priorities we outlined at the beginning of 2013 -- driving innovation across HP, improving operations, aligning our cost structure and rebuilding our balance sheet -- we made great progress."

Innovation is alive and well at HP

"The fourth quarter capped a year of significant innovation at HP. We launched OneView, a revolutionary consumer-inspired infrastructure management platform that allows customers to dramatically improve data centre operations while reducing cost. We introduced the new StoreVirtual storage appliance bundled with our industry-leading ProLiant servers, underscoring our leadership in the software-defined storage market.

"We also launched version 7.0 of the HP Vertica analytics platform, which dramatically simplifies analysis of semi-structured data. And just last week we announced a partnership with Salesforce.com to create the HP Salesforce Superpod, a dedicated instance of Salesforce running exclusively on HP's converged infrastructure."

A strong quarter for printing

"Our printing business delivered an excellent quarter with continued strong profitability. We outperformed the market for the second successive quarter, gaining four points of total unit market share over the prior year. Revenue for the quarter was down 1 percent, but we saw growth of 1 percent in constant currency. For the second consecutive quarter we grew unit placements, which was up 6 percent over the prior year driven by strength in laser volume and our SMB home business. Our managed print services business also had a good quarter."

Personal systems commercial PC strength

"In Personal Systems we outperformed the market with particular strength in our commercial PC business. Revenue for the quarter was down 2 percent over the prior year but flat in constant currency against the backdrop of a market declining 9.5 percent in units in the third calendar quarter. Overall, we gained 1.8 points of share over the prior year and 1.2 points sequentially. As a result, we improved our share position in all three regions. In the fourth fiscal quarter, HP saw its first [PC] unit growth since the first calendar quarter of 2012 even as the market saw a continued decline in units. Our commercial PC business grew revenue 4 percent over the prior year driven by commercial notebooks, with our Elitebook portfolio doing particularly well."

PC group leadership is paying off

"[HP Executive Vice President Printing and Personal Systems] Dion Weisler [pictured] is the fellow I asked to come run our Printing and Personal Systems Group in midsummer. He was a longtime executive at Lenovo and at Acer. He is Australian and has lived most of his career in Asia; in fact, six years in Beijing. He brings a very different perspective to this market. He is really doing an excellent job of market segmentation by customer segment, by screen size, by device form and then matching our products to that market segmentation. He has a very good [product] lineup coming [in 2014]."

A commercial tablet opportunity for the channel

"Tablets are important. We really think that HP's birthright is in tablets for the commercial sector -- everything from small business to large business. And, as you know, we had the ElitePad 900 [pictured], which was a good first step but not breakthrough. We have got a whole lineup of tablets both on Windows and Android for small business to medium business and enterprise coming in 2014."

Enterprise group sales growth

"In the Enterprise Group we saw revenue growth of 2 percent, the first time we have grown revenue in eight quarters. We saw improved sales execution, a strong hyper-scale quarter, and stabilisation in blades complemented by revenue growth in networking and storage.

"We made significant leadership changes in the Enterprise Group. [Enterprise Group Executive Vice President] Bill Veghte [pictured] and his leadership team have hit the ground running, and the early signs are encouraging.

"In servers we saw very strong growth in hyperscale over the prior year driven by several key wins, although this did put pressure on our margins in the quarter. Our blade business recovered as the benefits of our targeted segmentation and efforts to improve operational excellence paid off. We expect to gain over a point of share here and extend the market leadership position we have already held for 27 quarters."

A record quarter for 3Par storage

"In storage I am very pleased with our progress. Total storage product revenue grew 1 percent year over year with good sequential growth. We saw another record 3Par quarter and are very encouraged by the strong customer acceptance we are seeing. As a result, converged storage product revenue grew 47 percent over the prior year. Revenue declines moderated in traditional storage driven by higher storage networking attach and sales of our recently refreshed entry products. With these results, we expect to once again gain share in the combined high-end and midrange [storage] markets."

More innovation coming in 2014

"I am pretty proud of the innovation engine even in 2013. We are just going to build on that. The good news is HP really understands that our value-add has got to be around innovation and it has to be around things that the channel can sell. I think your readers and constituents will be pretty pleased by HP in 2014."

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Slideshow: Ten take-aways from HP's Q4 earnings

Chief executive Meg Whitman talks the channel.

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