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Will Mark Hurd Write a Book?

Posted on Wednesday, Dec 5th 2007

On November 19, Hewlett Packard Co (NYSE:HPQ) posted its Q4 earnings that beat all estimates. Revenue went up 15% y-o-y and 11.4% q-o-q to $28.3 billion. GAAP operating profit was $2.6 billion and GAAP diluted EPS was $0.81, up from $0.6 in Q4 2006. For full fiscal 2007, net revenue was $104.3 billion (up 14%), GAAP operating profit was $8.7 billion, and GAAP diluted EPS was $2.68, up from $2.18 in fiscal 2006.

Segment wise, Personal Systems Group (PSG) revenue grew 30% y-o-y and 13.5% q-o-q to $10.1 billion. PSG had exceptional growth in emerging markets especially China where it saw more than 100% growth. For fiscal 2007, PSG grew $7.2 billion in revenue. Within the segment, with the continuing trend toward mobility, notebook revenue grew 49% y-o-y, while desktop revenue grew 15% y-o-y.

Imaging and Printing Group revenue grew 4% y-o-y and 12% q-o-q to $7.6 billion. Enterprise Storage and Servers grew 10% y-o-y and 15.5% q-o-q to $5.2 billion. HP Services revenue was $4.4 billion, up 7% y-o-y and 5% q-o-q. HP Software revenue grew a mind-boggling 100% y-o-y and 26% q-o-q to $554 million, primarily due to strong growth from businesses acquired from Mercury Interactive. HP Financial Services reported revenue of $657 million, up 21% y-o-y and 13% q-o-q.

HP closed 10 acquisitions in 2007 and recently acquired MacDermid ColorSpan to expand its portfolio of digital presses and wide format prints and strengthen its position in the graphic arts industry, Atos Origin Middle East to strengthen its consulting and integration capabilities, and EYP Mission Critical facilities to add to its ability to expand its data center services.

HP paid a dividend of $0.08 per share in the quarter totaling $206 million. It spent $2.0 billion during the quarter to repurchase approximately 42 million shares of common stock. Its board of directors authorized an additional $8 billion for share repurchases.

For Q1 FY08, HP estimates revenue to be in the range of $27.4 billion to $27.5 billion and GAAP diluted EPS to be $0.75. For FY08, revenue is expected to be approximately $111.5 billion and GAAP diluted EPS is expected to be in the range of $3.12 to $3.17.

Its tock is trading around $51 after hitting a 52-week high of $53.48 on November 6. Market cap is around $131 billion. Splendid, splendid execution led by Mark Hurd. I hope Hurd writes a book, and even though I skipped Fiorina’s self-indulgent tome, I would be eagerly awaiting Mark Hurd’s, should he write one on how he made the HP elephant dance to his tune!

Hewlett-Packard Co. (HPQ)

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