Hewlett Packard Company (HPQ), a provider of printers, personal computer systems, software, services and IT infrastructure, has reported a 5.94 percent fall in profit for the quarter ended Oct. 31, 2014. The company has earned $1,330 million, or $0.70 a share in the quarter, compared with $1,414 million, or $0.73 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $2,014 million, or $1.06 a share compared with $1,959 million or $1.01 a share, a year ago. Revenue during the quarter went down marginally by 2.49 percent to $28,406 million from $29,131 million in the previous year period. Gross margin for the quarter expanded 160 basis points over the previous year period to 24.58 percent. Total expenses were 93.28 percent of quarterly revenues, down from 93.40 percent for the same period last year. This has led to an improvement of 12 basis points in operating margin to 6.72 percent.
Operating income for the quarter was $1,908 million, compared with $1,923 million in the previous year period. However, the adjusted operating income for the quarter stood at $2,741 million compared to $2,614 million in the prior year period. At the same time, adjusted operating margin improved 68 basis points in the quarter to 9.65 percent from 8.97 percent in the last year period.
"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."
Hewlett Packard 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 for the fiscal 2015 first quarter.
For fiscal 2015, the company 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.
Cash Flow
Hewlett Packard has generated cash of $12,333 million from operating activities during the year, up 6.25 percent or $725 million, when compared with the last year.
The company has spent $2,792 million cash to meet investing activities during the year as against cash outgo of $2,803 million in the last year. It has incurred net capital expenditure of $3,010 million on net basis during the year, up 18.22 percent or $464 million from year ago.
The company has spent $6,571 million cash to carry out financing activities during the year as against cash outgo of $7,943 million in the last year period. It has spent net of $2,431 million on repurchase of common stocks.
Cash and cash equivalents stood at $15,133 million as on Oct. 31, 2014, up 24.42 percent or $2,970 million from $12,163 million on Oct. 31, 2013.
Working Capital
Hewlett Packard has recorded an increase in the working capital over the last year. It stood at $6,410 million as at Oct. 31, 2014, up 32.36 percent or $1,567 million from $4,843 million on Oct. 31, 2013. Current ratio was at 1.15 as on Oct. 31, 2014, up from 1.11 on Oct. 31, 2013.
Debt Level
Hewlett Packard has recorded a decline in total debt over the last one year. It stood at $19,525 million as on Oct. 31, 2014, down 13.56 percent or $3,062 million from $22,587 million on Oct. 31, 2013.
Total debt was 18.92 percent of total assets as on Oct. 31, 2014, compared with 21.37 percent on Oct. 31, 2013. Debt to equity ratio was at 0.72 as on Oct. 31, 2014, down from 0.82 as on Oct. 31, 2013. Interest coverage ratio decreased to 13.07 for the quarter from 18.67 for the same period last year.
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