The management shakeup is official. COO Bill Veghte is now in charge of enterprise hardware, and will continue to lead H-P's (HPQ) cloud efforts. Dave Donatelli is now tasked with "identifying early-stage companies with new technologies" (unless he decides to leave). H-P has "no immediate plans" to hire a new COO (Zynga can relate).
Also, H-P's PR and marketing units are now under the joint control of new CMO Henry Gomez. Former CMO Marty Homlish is now H-P's "chief customer experience officer."
H-P's PC sales fell 11% Y/Y in FQ3. That's better than FQ2's 20% drop, but worse than Dell's 5% July quarter decline. Commercial PCs only -3%, but consumer -22%. Desktops -9%, notebooks -14%. Division op. margin fell 170 bps Y/Y to 3%.
Printing revenue -4% vs. -1% in FQ2. Op. margin -20 bps to 15.6%. Hardware units +5% thanks to a 12% increase for commercial (could bolster future supplies revenue), but supplies -4%.
Enterprise hardware -9% vs. -10% in FQ2. But op. margin +430 bps to 15.2%. Business critical systems -26% (Itanium decline), x86 servers -11%, storage -10%, tech services -7%, networking flat.
Enterprise services -9% vs. -8% in FQ2. Op. margin dove 770 bps to 3.3%.
Software +1% vs. -3% in FQ2. Op. margin +250 bps to 20.5%. License revenue was flat, cloud/SaaS revenue up just 4%.
SG&A spend -3% Y/Y to $3.27B, R&D -7% to just $797M (job cuts). Only $3M spent on buybacks. Operating cash flow was $2.7B, -6%.
FQ3 results, PR