HP has posted better-than-expected sales from its enterprise division, which helped overall profits rise, despite a slump in other units within its business including printing and PC sales.
Overall, sales from the Enterprise Group only rose by two percent year-on-year for the fourth quarter of fiscal year 2013. However, this was a notable improvement on the nine percent decline in Q3 and comes as HP looks to drive enterprise services as a key part of its business.
Within the division networking revenue grew three percent, server revenue rose 10 percent and storage revenues were up one percent. However, business-critical system sales slumped 17 percent and technology services fell six percent.
In total, the growth of enterprise services helped HP post a profit of $1.4bn for the quarter. This came despite revenue falling slightly on the same period last year, from $30bn in Q4 2012 to $29.1bn in Q4.
This dip in revenue was caused by a slump in several areas of the firm, notably sales of personal hardware units such as PCs and laptops, which fell by two percent year-on-year, while software revenues also fell by nine percent. Within this, though, software-as-a-service offerings rose 15 percent, underlining growing success in cloud offerings for HP.
The firm was able to offset these losses and post a profit thanks to its ongoing cost cuts, with chief executive Meg Whitman confirming 13,000 employees have left the company during 2013, taking the overall total to 24,600 people who have left since restructuring began.
Whitman was broadly optimistic on the numbers, claiming the firm was now set up to push forward after year of “fix and rebuild”.
“As I reflect on the key priorities we outlined at the beginning of 2013, driving innovation across HP, improving operations, aligning our cost structure and rebuilding our balance sheet, we made great progress,” she said.
“We also saw some positive momentum in our execution leading to pockets of revenue growth in key areas in Q4.”
Whitman also confirmed, during a Q&A session on the results, that HP was looking at the 3D printing market as a new area where it could grow, although she appeared to rule out any acquisitions to move this along.
“We intend to play in the 3D printing market. It's obviously different than paper printing, but some of the technology is the same. At least as we sit here today, we anticipate entering this organically,” she said.
“What we're doing is focusing on what's the value proposition by market segment, whether that be consumer or industrial, what's the competitive differentiation? And we've got some very interesting things coming, so stay tuned in 2014.”
She also sounded a note of caution around whether 3D printing would prove a huge market for the immediate future.
“This is an acorn, right. You've heard me say we've got to plant acorns and they will eventually become oak trees, but you should think in 2014 and 2015, this is an acorn that maybe has very good long potential,” she said.
“But the market is at its earliest stages and there is a lot of technology work that needs to be done to be able to print in the kind of timeframe that most consumers and most industries would actually find acceptable.”
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