Business-critical systems sales fall by one-quarter at HP
Third quarter results show revenues down eight per cent as big systems sales tank
HP's revenues are continuing to fall, with its third-quarter results showing a decline of eight per cent to $27.2bn - as expected by analysts' (well managed) consensus estimates.
All sectors registered falling revenues compared to the same quarter in 2012, with the exception of the company's Software segment, which achieved an increase in revenues of one per cent to $2.85bn.
This was achieved largely on the basis of a four per cent rise in support revenues, while licence revenues were flat. Software-as-a-service revenues also increased by four per cent.
The biggest hits were taken in the two main hardware sectors.
The Enterprise Group saw revenues fall by nine per cent to $20.6bn, with sales of "industry standard servers" down 11 per cent and "business critical systems" sales, in particular, down by a massive 26 per cent. Storage revenues were down by one-tenth.
In Personal Systems - PCs and laptops - revenues fell by 11 per cent to $23.5bn, largely due to plunging consumer sales. Consumer revenues fell by 22 per cent, while commercial PC and laptop sales fell by a gentler three per cent.
The fall in unit sales was less dramatic, down overall by eight per cent, indicating falling average selling prices as a result of competition, both in the sector and from other devices such as tablet computers.
Laptop unit sales fell by 14 per cent, while desktop unit sales were down by nine per cent - HP also sells other devices in its Personal Systems group. Its operating margin in Personal Systems is just three per cent.
Enterprise Services revenues, meanwhile, declined by nine per cent, while the operating margin was a poor 3.3 per cent. Application and Business Services revenue was down 11 per cent and Infrastructure Technology Outsourcing revenue declined seven per cent.
While computer hardware is a business with notoriously slim margins - especially given the aggressive price competition from Lenovo in recent years - the similar operating profit margin in the services business where margins ought to be much fatter will not have gone unnoticed by Whitman and her senior managers.
The quarter, though, was not without its highlights, with a five-year contract to host and manage the IT infrastructure and applications at aero-engine maker Rolls-Royce in the UK, and a deal with Piers Linney's Outsourcery to manage the up-and-coming company's infrastructure, too.