HP’s profit sinks 91pc in fourth quarter

22 Nov 2011

Meg Whitman, HP president and CEO

HP’s incurring of costs from its decision last August to stop selling tablets and smartphones based on the webOS software it acquired when HP purchased Palm earlier this year may have contributed to the company’s profit falling 91pc in the fourth quarter.

HP reported sales of US$32.1bn and profit of just US$239m for the final quarter of its fiscal year, which ended 31 October.

Revenue decreased 3pc from a year ago, with declining sales of PCs, printer ink and commercial computer systems.

“HP has a great opportunity to build on our strong hardware, software, and services franchises with leading market positions, customer relationships and intellectual property,” said Meg Whitman, HP president and chief executive officer.

“We need to get back to the business fundamentals in fiscal 2012, including making prudent investments in the business and driving more consistent execution.”

Cathie Lesjak, HP executive vice-president and chief financial officer, added that while FY11 proved to be a challenging year, HP grew non-GAAP EPS 7pc and generated US$12.6bn in cash flow from operations.

“We’re remaining cautious heading into FY12 but are focused on delivering our earnings outlook and driving shareholder value.”

Whitman’s plans for improving HP’s businesses, such as PCs and information-technology services, includes boosting research spending and limiting the size of acquisitions, Bloomberg reported. The idea is to save money and generate homegrown innovation.

Whitman told investors during a conference call that she’ll unveil more plans in the first half of next year.