HP 92% Profit Crash After Resurrection

92% profit crash, falling sales: HP latest financials make for some depressing reading, meaning the PC giant has a large hill to climb before it gets operations back on track. Q4 net income went into freefall – collapsing 92% to US$239 million for period to October 31.
Palo Alto based giant sales fell 3% to US$32.1 billion although toppedlater  analysts’ forecasts of $32 billion. Revenues also fell 3% to $32.12 billion.

“HP has a great opportunity to build on our strong hardware, software, and services franchises with leading market positions, customer relationships, and intellectual property,” said Meg Whitman, HP CEO. 

“We need to get back to the business fundamentals in fiscal 2012, including making prudent investments in the business and driving more consistent execution.”

Related costs which hit income included related to the wind down of HP’s webOS device business, a decision made by former boss Leo Apotheker, which saw the PC maker ditch its tablet operating system, and retailers like Harvey Norman sell off excess inventory cheap.

“Impairment of goodwill” and “restructuring charges” were also among the other one off costs cited, which totalled $885m.

HP also announced its intention to sell off its entire PC business and focus on software business, although this decision was later backtracked by Whitman, last month.

“HP is the largest provider of IT infrastructure, software and solutions to individuals and businesses of all sizes. We’re a leader in PCs, printers, servers, storage, automation, and services” Whitman said at the investor conference call yesterday.

“We’re in software to bring value to customers not to transform HP into a software company.”

Just last week HP announced several new notebooks and even an new Ultrabook for Australia.

“While FY11 proved to be a challenging year, we grew non-GAAP EPS 7% and generated $12.6 billion in cash flow from operations,” said Cathie Lesjak, HP executive vice president and chief financial officer.

“We’re remaining cautious heading into FY12 but are focused on delivering our earnings outlook and driving shareholder value.”