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HP sales plummet, closes China deal

Posted: 25 May 2015 ?? ?Print Version ?Bookmark and Share

Keywords:PC market? joint venture?

Hewlett-Packard's revenues and profits dropped amidst a sluggish PC market in which it claims to be gaining some share. The report came on the heels of the company's announcement to drive its server and networking business in China into a joint venture aiming to take on Lenovo.

Servers were one of the few bright spots in HP's dismal second fiscal quarter. Overall revenues were down 7 per cent from the same quarter last year to $25.45 billion, and profits slid to $1.01 billion from $1.27 billion a year ago.

"The PC market is weaker than I expected at the beginning of the year," said Meg Whitman, HP's chief executive, in a call with analysts.

The company's PC revenues were down 5 per cent year-over-year, and carved out a razor thin 3 per cent operating margin despite a 2 per cent rise in unit sales. The market continues to swing towards notebooks, which were up 19 per cent in units as desktops fell 14 per cent.

HP's businesses

HP's businesses were down across the line with the exception of x86 servers, which grew 11 per cent, not enough to lift the entire enterprise division.

HP believes it is gaining share in a PC market that continues to consolidate. It hopes for a small boost in consumer sales from the launch of Windows 10 late this summer, but does not expect to see the new operating system get much uptake in businesses this year.

By contrast, the cloud business is doing relatively well for HPat least in terms of x86 servers which were up 11 per cent in sales. Server selling process are on the rise and the business could expand in the second half of the yearsomething HP doesn't expect for most of its overall business which it said would be flat to slightly down in the current fiscal year.

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