Salto Partners

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Hewlett Packard’s Q1 Results

Today Salto Partners’ Andreas Scherer talked with E-Commerce Times about Hewlett Packard’s first quarter earnings for the new fiscal year 2013. No matter how one looks at the numbers, they ain’t pretty.

HP reported first quarter earnings of $1.6 billion, or 63 cents a share, on revenue of $28.4 billion. This is down 6 percent from a year ago. Some analysts expected worse, so the good news is that is not as bad as some believed it would be.

 If you take a look under the hood you’ll see that all major business units are down year over year and quarter over quarter.

 1. The Printing and Personal Systems delivered $14.13 billion revenue. That is $1.02 billion less revenue compared to the $15.15 billion revenue it did in Q1 of 2012. This division of HP is competing in a tough market segment without any significant market share in hot segments such as tablets and smart phones.

 2. The Enterprise Group delivered $6.984 billion revenue. It dropped more than $475 million compared to last quarter. The EBITDA contribution of this group has declined year over year and quarter over quarter.

 3. Enterprise Services delivered $5.919 billion revenue. It dropped more than $433 million quarter over quarter. What’s even worse. The group only delivered only $76 million EBIDTA. A service organization operating at 1.3 percent EBITDA margin is at this revenue level a significant concern. Another 5-10% drop in revenue and HP is going to lose a lot of money in this business unit.

Now, Meg Whitmen gave a more upbeat outlook for the rest of FY 2013. This could mean that the sales pipeline across the major business units looks stronger than the current numbers indicate. It could mean that there are new products in the pipeline that can make an instant impact. Or it could mean that HP’s strategy is simply hope. The next quarters will be telling which way the Silicon Valley icon is going.

You find the full article here. 

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Apple Q3 Earnings

This week I sat down with MacNewsWorld on Apple after it missed its earnings the day before. So, here is what happened.

1. The company posted fiscal third-quarter earnings of $9.32 per share, up from $7.79 a share in the year-earlier period. Net income was $8.8 billion, or $9.32 per share. That was up 21 percent from $7.3 billion, or $7.79 per share, a year ago. Revenue rose 23 percent to $35 billion from $28.57 billion a year ago. Apple sold 26 million iPhones in the quarter, at the low end of expectations. However, it sold 17 million iPads, exceeding forecasts. The company reported that its cash pile rose to $117 billion, an increase of $7 billion during the quarter. Most CEOs would announce such results with goose bumps of excitement. But we are talking about Apple as in AAPL. Analysts had expected the company to report earnings excluding items of $10.37 a share on $37.22 billion in revenue, according to a consensus estimate from Thomson Reuters. Apple’s fourth-quarter guidance also disappointed: It forecast $7.65 a share for earnings on revenue of $34 billion vs. analysts’ expectations of $10.22 a share earnings on revenue of $38 billion.

2. Let me state the obvious first. Apple will need to come out with the iPhone 5 rather sooner than later. People wait for it to hit the market. It will close the gashing revenue wound.

3. The bigger question for Apple is: what is the next mega gadget everybody wants next year that has not been created today? That enormous $117B stockpile of cash would allow the company to do all kinds of mergers and acquisition. Yet, given the type of company Apple is, I believe that the answer will come from Apple’s own labs.