HP Reports Fiscal 2014 Full-Year and Fourth Quarter Results

PALO ALTO, CA -- (Marketwired) -- Nov 25, 2014 -- HP (NYSE: HPQ)

  • Fiscal 2014 net revenue of $111.5 billion, down 1% from the prior-year period and flat on a constant currency basis
  • Fiscal 2014 non-GAAP diluted net earnings per share of $3.74, within the previously provided outlook of $3.70 to $3.74 per share
  • Fiscal 2014 GAAP diluted net earnings per share of $2.62, within the previously provided outlook of $2.60 to $2.64 per share
  • Fourth quarter net revenue of $28.4 billion, down 2% from the prior-year period and down 3% on a constant currency basis
  • Fourth quarter non-GAAP diluted net earnings per share of $1.06, up 5% from the prior-year period, versus the previously provided outlook of $1.03 to $1.07 per share
  • Fourth quarter GAAP diluted net earnings per share of $0.70, down 4% from the prior-year period, versus the previously provided outlook of $0.67 to $0.71 per share
  • Fourth quarter cash flow from operations of $2.7 billion, down 4% from the prior-year period
  • Returned $1.1 billion to shareholders in the form of share repurchases and dividends in the fourth quarter
  • Operating company net cash of $5.9 billion, a sequential improvement of $1 billion

HP fiscal 2014 fourth quarter and full-year financial performance

                                                                            
                           Q4 FY14 Q4 FY13      Y/Y    FY14    FY13      Y/Y
GAAP net revenue ($B)        $28.4   $29.1     (2%)  $111.5  $112.3     (1%)
GAAP operating margin         6.7%    6.6% 0.1 pts.    6.4%    6.4%   0 pts.
GAAP net earnings ($B)        $1.3    $1.4     (6%)    $5.0    $5.1     (2%)
GAAP diluted net earnings                                                   
 per share                   $0.70   $0.73     (4%)   $2.62   $2.62       0%
Non-GAAP operating margin     9.6%    9.0% 0.6 pts.    8.8%    8.5% 0.3 pts.
Non-GAAP net earnings ($B)    $2.0    $2.0       3%    $7.1    $6.9       3%
Non-GAAP diluted net                                                        
 earnings per share          $1.06   $1.01       5%   $3.74   $3.56       5%
Cash flow from operations                                                   
 ($B)                         $2.7    $2.8     (4%)   $12.3   $11.6       6%
                                                                            

Information about HP's use of non-GAAP financial information is provided under "Use of non-GAAP financial information" below.

HP today announced financial results for fiscal 2014 and fourth quarter ended October 31, 2014.

Fiscal 2014 net revenue of $111.5 billion was down 1% from the prior-year period and flat on a constant currency basis.

Fiscal 2014 GAAP diluted net earnings per share (EPS) was $2.62, flat in comparison with the prior-year period amount and within the previously provided outlook of $2.60 to $2.64 per share. Fiscal 2014 non-GAAP diluted net EPS was $3.74, up from $3.56 in the prior-year period and within the previously provided outlook of $3.70 to $3.74 per share. Fiscal 2014 non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $2.1 billion and $1.12 per diluted share, respectively, related to restructuring charges, the amortization of intangible assets and acquisition-related charges.

Fourth quarter net revenue of $28.4 billion was down 2% from the prior-year period and down 3% on a constant currency basis.

Fourth quarter diluted net GAAP EPS was $0.70, down from $0.73 in the prior-year period and within its previously provided outlook of $0.67 to $0.71 per share. Fourth quarter non-GAAP diluted net EPS was $1.06, up from $1.01 in the prior-year period and within its previously provided outlook of $1.03 to $1.07. Fourth quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $684 million and $0.36 per diluted share, respectively, related to restructuring charges, the amortization of intangible assets and acquisition-related charges.

"I'm excited to say that HP's turnaround continues on track," said Meg Whitman, chairman, president and chief executive officer, HP. "In FY14, we stabilized our revenue trajectory, strengthened our operations, showed strong financial discipline, and once again made innovation the cornerstone of our company. Our product roadmaps are the best they've been in years and our partners and customers believe in us. There's still a lot left to do, but our efforts to date, combined with the separation we announced in October, sets the stage for accelerated progress in FY15 and beyond."

Outlook
For fiscal 2015, HP estimates non-GAAP diluted net EPS to be in the range of $3.83 to $4.03 and GAAP diluted net EPS to be in the range of $3.23 to $3.43. Fiscal 2015 non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.60 per share, related primarily to the amortization of intangible assets and restructuring charges.

For the fiscal 2015 first quarter, HP estimates non-GAAP diluted net EPS to be in the range of $0.89 to $0.93 and GAAP diluted net EPS to be in the range of $0.72 to $0.76. Fiscal 2015 first quarter non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.17 per share, related primarily to the amortization of intangible assets and restructuring charges.

The fiscal 2015 full year and first quarter outlooks do not include costs associated with the separation, which are expected to be non-GAAP adjustments beginning in Q1 2015.

Asset management
HP generated $2.7 billion in cash flow from operations in the fourth quarter, down 4% from the prior-year period. Inventory ended the quarter at $6.4 billion, up 3 days year over year to 27 days. Accounts receivable ended the quarter at $13.8 billion, down 5 days year over year to 44 days. Accounts payable ended the quarter at $15.9 billion, up 11 days year over year to 67 days. HP's dividend payment of $0.16 per share in the fourth quarter resulted in cash usage of $309 million. HP also utilized $750 million of cash during the quarter to repurchase approximately 21.7 million shares of common stock in the open market. HP exited the quarter with $15.5 billion in gross cash.

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