HP and HPE round off first solo years with plummeting Q4 profits

Two separate companies report their first full-year results as independent companies

HP and Hewlett Packard Enterprise (HPE) have reported mixed fortunes in their first year as separate companies, but both saw profits plunge annually in the final quarter.

At HPE, for the full year ending 31 October 2016, net profits were up 24 per cent annually to $3.2bn, on sales which fell four per cent to $50.1bn over the same period. Meanwhile, at HP, its full-year GAAP net profit from continuing operations fell 28 per cent annually to $2.7bn, on sales which were down six per cent over the same period to $48.2bn.

In the final quarter of the year, HPE's net profits fell a whopping 78 per cent to $302m year on year, while at HP, GAAP net profit from continuing operations fell 66 per cent to $500m over the same period. Sales at each firm in Q4 fell nine per cent to $12.5bn and rose two per cent to $12.5bn respectively.

HP's CEO Dion Weisler said on an earnings call, transcribed by Seeking Alpha, that Q4 represented "another [period] of solid progress in both innovation and execution".

"As we wrap up our first fiscal year as HP, we continue to deliver on our financial commitments and I'm proud of the progress we're making in our core growth and future framework," he said.

Meg Whitman (pictured), HPE's CEO, branded the last 12 months as an "historic year".
She dismissed any negative impact of the US election on business and said Brexit actually hit trade more.

"Actually, we saw a bigger impact of Brexit when the UK decided to leave the European Union, because it actually froze purchasing quite broadly across Europe for a bit," she admitted, on a call, also transcribed by Seeking Alpha.

When questioned about the competitive landscape, Whitman admitted it is "very competitive out there" but insisted HPE is holding its own.

"I think, Cisco is aggressive, but we've seen some weakening in ECS and BCE," she said. "They are not as aggressive as they were probably 18 months to two years ago.

"Dell/EMC, it's hard for us to tell how well Dell/EMC is doing, because of course, they're not a public company anymore. But we like our win rate. We like our strategy of getting smaller and more focused, while they're still integrating a very large acquisition.

"And Lenovo, we intercepted a huge amount of server volume in the move from IBM to Lenovo, and we haven't seen them pop back yet. I don't ever count Lenovo out."