Hewlett Packard reported a drop in revenue in the fourth quarter of this year for most of the company’s business segments.
Despite Hewlett Packard’s three years of efforts in turning its business around, the tech giant still has a lot of work ahead of it.
Meg Whitman CEO decided to divide the company in two. Whitman believes there are better opportunities to grow in the department that sells software, services and tech hardware than in the PC and printer division and it will take a year to divide the two departments. Tuesday, Hewlett Packard reported a drop in revenue by 2 percent in the last quarter, making this the 12th decline over the last 13 quarters.
Hewlett Packard’s profit was down 6 percent from a year ago. For the fiscal quarter of August to October, Hewlett Packard reported a net income of $1.3 billion, which comes to 70 cents per company share, on revenue of $28.4 billion. These numbers falling short of what analysts from FactSet forecasted 80 cents per share earnings on revenue of $28.7 billion.
PC sales have gone down because of people increasingly turning their attention towards smartphones and numerous other mobile devices. But this is the biggest part of Hewlett Packard’s business, responsible for over 30 percent of HP’s revenue of $112 billion.
Hewlett Packard claimed its PC business was the only segment that grew. But the weak future for the whole PC industry is partially responsible of her decision to fragment the company. Whitman said the company is working on increasing profits and it should stabilize its revenue next year. She also added that when the split will be complete, each segment will operate a lot more efficiently.
“We’re going to make more progress as separate companies than we would have if we kept them together,”
Daniel Ives, FBR Capital Markets analyst said the best opportunities for future growth of Hewlett Packard are in selling services and software able to help customers analyze massive amounts of data or in internet based computing. He also added that for the time being, the PC and printer businesses continue to pull down Hewlett Packard’s business.