HP has posted revenues of $111.5bn for its 2014 fiscal year, down one percent on 2013, with fourth-quarter revenues coming in at $28.4bn, down two percent on the same period last year.
Overall profits for the quarter were $1.3bn, a decline of six percent on the same period last year. Overall, HP made a profit of $5bn for 2014 compared with $5.1bn in 2013.
The decline in revenues will pose more questions for HP as the firm prepares for a momentous 2015 when it will split in two, one unit focused on business software and services, the other on PC and printer hardware.
The revenue fortunes of these two distinct areas of HP's business were markedly different in the last quarter of 2014, underlining the challenges facing both sets of management.
Personal Systems, which covers laptops, tablets and desktop systems, saw an overall revenue increase of four percent. This was driven entirely by sales of systems to businesses, which rose seven percent. Consumer revenues, by contrast, were down two percent.
Printing saw a five percent revenue decline, despite sales to businesses rising five percent. Consumer market sales were down one percent and supplies revenue was down seven percent.
All other business units were down: Software (one percent), Enterprise Group (four percent) and Enterprise Services (seven percent).
Only network revenue in the Enterprise Group (up two percent) and software licensing (up two percent) saw any growth in any of the divisions.
One notable area of worry for HP will be flat software-as-a-service (SaaS) revenues in the quarter compared with the same period last year.
Given the push to the cloud and HP’s repeated message around meeting the hybrid needs of customers, the lack of growth in this market will be of concern.
Chief financial officer Cathie Lesjak acknowledged the lack of growth in the SaaS area, but insisted that it will improve in time.
“In software, we continue to align with customer demands and shifted our product development resources and go-to-market focus towards SaaS and subscription-based offerings,” she said on an earnings call.
“This shift may create near-term revenue headwinds but will set us up for long-term success."
Glenn O'Donnell, vice president and research director at Forrester, told V3 he found it surprising that HP had not seen growth in its cloud business.
"The overall SaaS market is going gangbusters, so you would expect any vendor selling via the SaaS model to do well," he said.
"That said, it's also a cutthroat place to be doing business. SaaS has become a very crowded place to be, and a vendor has to perform exceptionally to thrive."
O'Donnell added that HP will find it tough if it lets the market pass it by. "HP has proved lacklustre in some of its SaaS-based offerings versus the competition," he said.
"Customers have much more flexibility in choosing and swapping vendors with SaaS. Coming from behind is a tough place to be."
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