Hewlett-Packard executives expect sales of IT products to rebound in the coming year and they said the company is positioned to outpace the market and record overall sales growth between 3 and 4 percent in 2010.
"We think we have the best portfolio of technologies and services in the industry," said CEO Mark Hurd, speaking at a securities analyst meeting Thursday. "We're pretty well-positioned to go out in the marketplace and win. I think HP's best days are ahead of it, not behind it."
"Our current view is that the IT market returns to growth in fiscal 2010. And given the strength of our portfolio and ongoing investments in market coverage, we do expect to grow faster than the market," said CFO Cathie Lesjak.
HP is in the midst of its fourth fiscal quarter that ends Oct. 31. For the third quarter ended July 31, the company reported a 2 percent decline in sales to $27.5 billion and a 19 percent drop in earnings to $1.6 billion.
But the focus of the analyst meeting was fiscal 2010. Hurd said HP's addressable market, including PCs, servers, storage, printers, networking, software and services, is $1.3 trillion.
Hurd said he expects sales growth in the IT market to resume in 2010, then added: "We will grow faster than the IT market."
HP predicts that its sales in fiscal 2010 will reach $117 billion to $118 billion, up 3 to 4 percent over fiscal 2009, Lesjak told analysts. Earnings will be between $3.60 and $3.70 per share.
The CFO said HP is forecasting that sales from its personal systems group will grow between 3 and 5 percent in fiscal 2010, but sales from its imaging and printing group will be flat by up to 2 percent.
Enterprise systems and storage technology sales will grow between 2 and 4 percent in fiscal 2010, as will HP services. HP software sales will grow between 7 and 9 percent.
Hurd said HP's cost structure is "much improved from several years ago," but later added: "We don't quite have HP operating as effectively as we can." He said there is still "material opportunity for us" to improve the company's operating efficiencies.
One place HP is still cutting costs is in its EDS services unit, which it renamed HP Enterprise Services this week. So far this year, HP has cut $900 million in operating costs out of the operation through the company's integration efforts, Lesjak said, with plans to cut another $1.2 billion through 2010.
Showing posts with label profits. Show all posts
Showing posts with label profits. Show all posts
Saturday, October 24, 2009
Accenture profit falls 41 %
NEW YORK — Consulting and outsourcing firm Accenture PLC posted a 41 percent drop in fiscal fourth-quarter profit Thursday, as revenue fell across nearly all business groups and the company recorded a hefty restructuring charge.
Accenture also said it will raise its cash dividend by 50 percent to 75 cents per share. Payments will be semiannual, instead of annual, starting in the third quarter of 2010, the company said. The board also authorized the repurchase of $4 billion additional shares.
For the three months ended Aug. 31, the company earned $254.7 million, or 39 cents per share. That compared with $434.8 million, or 67 cents per share, in the year-ago period. Excluding a restructuring charge of $253 million, or 24 cents per share, the company earned 63 cents per share.
Quarterly revenue slid 14 percent to $5.15 billion from $6 billion last year.
Analysts polled by Thomson Reuters expected earnings of 63 cents per share on higher revenue of $5.44 billion. Analysts typically do not include one-time charges in their estimates.
The restructuring charge was related to "the realignment of the company's work force" and to global real estate consolidation, the company said in a release. In August, Accenture said it would cut some 336 senior-level executive positions, totaling about 7 percent of its senior executives, and reduce office space.
Revenue in the fourth quarter fell across nearly all groups as a result of the global downturn, the company said in a release. In all, consulting revenue totaled $2.91 billion, a decrease of 19 percent from last year. Outsourcing revenue fell 7 percent to $2.23 billion.
For the full year, the company earned $1.59 billion, or $2.44 per share, down from $1.69 billion, or $2.65 per share, a year ago. Revenue slid 8 percent to $21.58 billion from $23.39 billion.
Accenture expects net revenue for the first quarter to range between $5.3 billion and $5.5 billion, but did not provide an earnings per share estimate. Analysts have forecast earnings of 69 cents per share on higher revenue of $5.54 billion.
For fiscal 2010, Accenture forecast profit of $2.64 to $2.72 per share. The midpoint matches analysts' $2.68-per-share average estimate. The company is targeting new bookings for the year in the range of $23 billion to $26 billion.
"We expect the first half of fiscal 2010 to be challenging year on year," Chief Financial Office Pam Craig said on a conference call with analysts. "We are assuming that the global economy and our business will improve in the second half of the fiscal year, even though it is still an uncertain and unpredictable time."
Craig said the company expects fiscal 2010 revenue to range from a 3 percent drop from 2009 levels to a 1 percent increase, as it expects the first half of its fiscal year to trend below 2009 results. That would imply a range of $20.93 billion to $21.8 billion.
Analysts have forecast higher full-year revenue of $21.99 billion, on average.
Shares of Accenture slid 56 cents, or 1.5 percent, to $35.97 in after-hours trading, after falling 74 cents to close the regular session at $36.53.
Accenture also said it will raise its cash dividend by 50 percent to 75 cents per share. Payments will be semiannual, instead of annual, starting in the third quarter of 2010, the company said. The board also authorized the repurchase of $4 billion additional shares.
For the three months ended Aug. 31, the company earned $254.7 million, or 39 cents per share. That compared with $434.8 million, or 67 cents per share, in the year-ago period. Excluding a restructuring charge of $253 million, or 24 cents per share, the company earned 63 cents per share.
Quarterly revenue slid 14 percent to $5.15 billion from $6 billion last year.
Analysts polled by Thomson Reuters expected earnings of 63 cents per share on higher revenue of $5.44 billion. Analysts typically do not include one-time charges in their estimates.
The restructuring charge was related to "the realignment of the company's work force" and to global real estate consolidation, the company said in a release. In August, Accenture said it would cut some 336 senior-level executive positions, totaling about 7 percent of its senior executives, and reduce office space.
Revenue in the fourth quarter fell across nearly all groups as a result of the global downturn, the company said in a release. In all, consulting revenue totaled $2.91 billion, a decrease of 19 percent from last year. Outsourcing revenue fell 7 percent to $2.23 billion.
For the full year, the company earned $1.59 billion, or $2.44 per share, down from $1.69 billion, or $2.65 per share, a year ago. Revenue slid 8 percent to $21.58 billion from $23.39 billion.
Accenture expects net revenue for the first quarter to range between $5.3 billion and $5.5 billion, but did not provide an earnings per share estimate. Analysts have forecast earnings of 69 cents per share on higher revenue of $5.54 billion.
For fiscal 2010, Accenture forecast profit of $2.64 to $2.72 per share. The midpoint matches analysts' $2.68-per-share average estimate. The company is targeting new bookings for the year in the range of $23 billion to $26 billion.
"We expect the first half of fiscal 2010 to be challenging year on year," Chief Financial Office Pam Craig said on a conference call with analysts. "We are assuming that the global economy and our business will improve in the second half of the fiscal year, even though it is still an uncertain and unpredictable time."
Craig said the company expects fiscal 2010 revenue to range from a 3 percent drop from 2009 levels to a 1 percent increase, as it expects the first half of its fiscal year to trend below 2009 results. That would imply a range of $20.93 billion to $21.8 billion.
Analysts have forecast higher full-year revenue of $21.99 billion, on average.
Shares of Accenture slid 56 cents, or 1.5 percent, to $35.97 in after-hours trading, after falling 74 cents to close the regular session at $36.53.
Saturday, August 22, 2009
Profits up for IT Companies
Logica almost doubles profit for most recent half-year while CSC sees net income grow 5.5% despite revenue dip
Two IT services companies reported growing profits last week, providing some much-needed good news for the IT sector.
European IT services and BPO firm Logica grew pre-tax profits to £24 million for the second half of its financial year, up from £12 million for the same period last year. The company reported revenue growth of 6% (after correcting for the number of working days) to £1.87 billion, driven in the main by a 10% boost in outsourcing revenues.
At the same time, Logica cut the total number of subcontractors it employs by 20%. Beyond the 1,900 redundancies it has already declared, Logica said there would be no more job cuts for internal staff.
Meanwhile, US IT services and outsourcing company CSC managed to grow net income by 5.6% to $131 million for its most recent financial quarter, despite a decline in revenues of 12% to $3.9 billion.
CSC’s commercial outsourcing division and managed services arm each saw revenue fall steeply: by 22% to $840 million and by 17.6% to $1.56 billion respectively. These were tempered, however, by a 1.7% revenue increase for the North American public sector division to $1.52 billion.
The company also announced its intention to acquire the Brazilian division of bankrupt US management and technology consultancy BearingPoint. CSC described Brazil as South America’s “largest, most important and growing market”.
Two IT services companies reported growing profits last week, providing some much-needed good news for the IT sector.
European IT services and BPO firm Logica grew pre-tax profits to £24 million for the second half of its financial year, up from £12 million for the same period last year. The company reported revenue growth of 6% (after correcting for the number of working days) to £1.87 billion, driven in the main by a 10% boost in outsourcing revenues.
At the same time, Logica cut the total number of subcontractors it employs by 20%. Beyond the 1,900 redundancies it has already declared, Logica said there would be no more job cuts for internal staff.
Meanwhile, US IT services and outsourcing company CSC managed to grow net income by 5.6% to $131 million for its most recent financial quarter, despite a decline in revenues of 12% to $3.9 billion.
CSC’s commercial outsourcing division and managed services arm each saw revenue fall steeply: by 22% to $840 million and by 17.6% to $1.56 billion respectively. These were tempered, however, by a 1.7% revenue increase for the North American public sector division to $1.52 billion.
The company also announced its intention to acquire the Brazilian division of bankrupt US management and technology consultancy BearingPoint. CSC described Brazil as South America’s “largest, most important and growing market”.
Friday, April 24, 2009
Microsoft: First Time Drop in Revenues
Microsoft reported a drop in quarterly revenues for the first time in the 23 years since it went public.
But investors still gave the world largest software company their approval, sending Microsoft shares higher in after-market trading as its aggressive cost cutting measures preserved profitability.
The Seattle-based company said its revenues dropped 6 per cent to $13.7 billion, compared to the year-ago quarter. Profits of $3 billion represented a 32-per cent drop from the $4.4 billion it earned in the same period last year.
The company has been hit hard by a drop in consumer spending, with people delaying or canceling purchases of new computers. Sales of Microsoft's Windows operating system were down for only the second time in history, but Microsoft said it saw signs that the worst may be over.
"While market conditions remained weak during the quarter, I was pleased with the organisation's ability to offset revenue pressures with the swift implementation of cost-savings initiatives," Microsoft chief financial officer Chris Liddell said.
"We expect the weakness to continue through at least the next quarter."
But investors still gave the world largest software company their approval, sending Microsoft shares higher in after-market trading as its aggressive cost cutting measures preserved profitability.
The Seattle-based company said its revenues dropped 6 per cent to $13.7 billion, compared to the year-ago quarter. Profits of $3 billion represented a 32-per cent drop from the $4.4 billion it earned in the same period last year.
The company has been hit hard by a drop in consumer spending, with people delaying or canceling purchases of new computers. Sales of Microsoft's Windows operating system were down for only the second time in history, but Microsoft said it saw signs that the worst may be over.
"While market conditions remained weak during the quarter, I was pleased with the organisation's ability to offset revenue pressures with the swift implementation of cost-savings initiatives," Microsoft chief financial officer Chris Liddell said.
"We expect the weakness to continue through at least the next quarter."
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