HP Sees Networking Revenue Up Ahead of Split
Hewlett-Packard showed 2% revenue growth for its networking products in what was an otherwise weak fiscal fourth quarter, as the company prepares to split into two entities, one focused on personal systems and printing, the other aimed at networking, storage and software for companies pushing into SDN and cloud NFV.
For the fiscal fourth quarter, HP Inc. (NYSE: HPQ) reported total revenue of about $28.4 billion, down more than 2% year-on-year. For the full fiscal year, total revenue was down about 1% to $111 billion.
The 2% nudge in networking revenue to $669 million may help HP Enterprise, the networking/storage/software spinoff, start out on the right foot. Overall, that group under the current corporate structure saw revenue down about 4% for the quarter -- networking was only portion that was up. (See HP to Split Into Two Companies.)
HP CEO Meg Whitman, who will be president and CEO of HP Enterprise, acknowledged on the earnings call ongoing market challenges for many HP groups, including growing competitive pressure in foreign markets. She cited the potential for both new HP spinoffs to participate in M&A activity heading into next year.
"We remain interested in acquiring assets if it's the right thing to do for what will become HP, Inc. [the personal systems/printing spinoff] or HP Enterprise," Whitman said, adding, "But, we'll remain disciplined and not do things that aren't in the best interests of shareholders." Those comments come after EMC Corp. (NYSE: EMC) reportedly was discussing a merger with HP, though those discussions were said to have ended. (See EMC Mulls Merger With HP or Dell – Reports.)
Whitman did mention "SDN and networking" as one of several growth areas for HP in 2015, though did not get into further specifics. The company appeared to boost its hopes in the cloud NFV market earlier this month by aligning with Nokia Networks to support its OpenStack Helion cloud platform. HP also recently announced an SDN applications store for service providers. (See Nokia, HP Stack Their Cloud NFV Bets and HP Launches SDN App Store.)
HP officials also said on the call that it still hasn't reached its goal of cutting 50,000 jobs. About 41,000 employees left the company during fiscal 2014.
— Dan O'Shea, Managing Editor, Light Reading