Hewlett-Packard Thursday disclosed plans to lay off an additional 11,000 to 16,000 employees after it posted sales slightly below analyst expectations for its second fiscal quarter, ended April 30.
The additional cutbacks come on top of the 34,000 positions that HP was eliminating in connection with a multiyear restructuring plan that was outlined in May 2012.
HP posted second-quarter non-GAAP diluted earnings in line with the Wall Street consensus of 88 cents per share for the quarter, but revenue came in at $27.3 billion, just below analysts' estimates of $27.43 billion. In the year ago quarter, HP posted non-GAAP diluted earnings per share of 87 cents on sales of $27.58 billion. HP shares closed down 74 cents at $31.78 prior to the announcement and were down 58 cents to $31.20 in after-hours trading.
Despite the additional cutbacks, HP CEO Meg Whitman said the company’s turnaround remains on track. “With each passing quarter, HP is improving its systems, structures and core go-to-market capabilities. We’re gradually shaping HP into a more nimble, lower-cost, more customer and partner-centric company that can successfully compete across a rapidly changing IT landscape,” she said in a prepared statement.
Sam Haffar, the CEO of Houston-based Computex Technology Solutions, one of the top national solution providers at no. 185 on the 2013 CRN Solution Provider 500, said he sees HP gaining momentum in the market. In fact, he said Computex’s HP business is up 100 percent in the first two quarters.
“HP has innovative products, great technology and great patents,” he said. “The HP partnership is better than ever. We are aligned with all of their different businesses and are firing on all cylinders. We couldn’t be happier. It’s a great company to partner with.”
Haffar said Wall Street expectations are unrealistic given the size of HP. “I don’t care what Wall Street analysts say, I see the turnaround on track,” he said. “The channel sales engagement is better than ever. We are very happy and pleased with the relationship, and I know a lot of VARs feel the same way.”
HP Enterprise Group sales were down two percent to $13.65 billion in the quarter compared to $13.74 billion the same quarter one year ago with a 14 percent drop in Business Critical Systems sales and a six percent drop in storage sales. Industry standard server sales were up just one percent.
HP’s Personal Systems sales had a strong quarter with sales up seven percent at $16.71 billion, propelled by a 12 percent increase in commercial sales. Desktop and notebook unit shipments were both up six percent.
HP’s printing business sales were $11.65 billion, down four percent in the quarter with supplies sales down six percent.
Enterprise services sales were $11.3 billion, down seven percent in the quarter with application and business services sales for the business unit down eight percent and infrastructure technology outsourcing sales down seven percent
HP Software sales, meanwhile, were flat for the quarter at $1.89 billion.
HP said it generated cash flow from operations of $3 billion during the quarter and returned $1.1 billion to shareholders in the form of dividends and share repurchases.
PUBLISHED MAY 22, 2014