HP this week released its fourth quarter 2014 and fiscal 2014 full-year financial results. The company reported quarterly revenue of $28.4 billion, down 2% from fourth quarter 2013. Full-year revenue was reported to be $111.5 billion, down 1% year-over-year.
HP's lackluster 2014 financial results were not unexpected, and the company hit both its GAAP and non-GAAP diluted net share earnings targets ($2.62 and $3.74, respectively). Even so, investors will be wondering just what HP can do to grow revenue and compete in a tech market increasingly dominated by the likes of Google, Apple, Microsoft, and Amazon.
HP CEO Meg Whitman exuded confidence in a statement accompanying the financials. She commented that the company's revenue is now "stabilized" and reassured investors that "accelerated progress" will be seen next year.
"I'm excited to say that HP's turnaround continues on track," said Whitman. "In FY14, we stabilized our revenue trajectory, strengthened our operations, showed strong financial discipline, and once again made innovation the cornerstone of our company. Our product roadmaps are the best they've been in years and our partners and customers believe in us. There's still a lot left to do, but our efforts to date, combined with the separation we announced in October, sets the stage for accelerated progress in FY15 and beyond."
The separation Whitman is referring to is HP's recently announced plan to split into two companies. The newly created Hewlett-Packard Enterprise will focus on enterprise software and infrastructure sales, leaving HP's older printing and computing operations to a company named HP Inc.
HP's Enterprise Services was one of its worst-performing divisions during fiscal 2014. HP Enterprise Services revenue was down 7% year-over-year and the company's Enterprise Group sales were also down for the year, falling 4% compared to the division's sales in fiscal 2013.
Based on these results, it appears that Hewlett-Packard Enterprise will have significant challenges in the future. HP's biggest recent leaps into the enterprise sector have turned out to be disasters. In the third quarter 2012, HP logged an $8 billion impairment charge related to its acquisition of IT services company Electronic Data Systems (EDS). The following quarter HP logged another huge $8.8 billion impairment charge related to what HP claimed was fraudulent accounting on the part of recently-acquired enterprise search and knowledge management services company Autonomy.