Shares of Hewlett-Packard (HPQ) are enjoying a stellar morning and indeed getting that dead cat bounce that I talked about in my preview yesterday, despite the carnage in the rest of the markets, both here at home and overseas. The primary driver is the fact that the company will soon be splitting into two: HP Inc. (which will be the PCs and printers company) and HP Enterprise (will comprise the rest, including the sale and servicing of IT hardware/servers /software).
So what are our eager-beaver buyers getting into? Taking a look into each business segment paints the following fugly picture:
Enterprise Services Group: Revenues were down 11% to $4.98 billion with OMs of 6%. Its outsourcing business was down 13% and the app/business services were down 7%.
Enterprise Group (IT hardware): Revenue up 2% to $7 billion. OMs at 13%. X86 server sales up 8%. High-end servers down 21%. Storage servers down 2%. Networking servers plus 22% (thanks to adding Aruba Networks revenues). Tech services down 9%.
Software unit: Revenues down 6%. OMs at 20.6%. Licensing down 11%. Support down 3%. Professional services down 8% and SaaS down 4%.
Financial services unit: Revenue down 6%. OMs at 10.8%. Net assets down 2%.
The above four will make up HP Enterprise. Can anyone really find a single thing of value or meaningful growth?
Now come the two parts that will make up HP Inc.:
PCs: PC revenues down 13% year over year to $7.5 billion. OMs of 3% (talk about a commodity product, no?). Notebooks down 8%. Desktops down 20%. Workstations down 12%.
Printers: Revenue down 9% to $5.1 billion. OMs at 17.8%. Printer supplies down 6%. Commercial printers down 11%. Consumer hardware down 24%.
Carly Fiorina and Meg Whitman have run this once-iconic company into the ground with their misguided moves.
Talk about a fast train to nowhere.