More information on HP’s quarterly earnings, including additional financial analysis and an earnings overview presentation, is available on HP’s Investor Relations website at www.hp.com/investor/home.
HP’s Q1 FY11 earnings conference call is accessible via an audio webcast at www.hp.com/investor/2011q1webcast.
About HP
HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world’s largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services and IT infrastructure to solve customer problems. More information about HP is available at http://www.hp.com.
Use of non-GAAP financial information
To supplement HP’s consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter and prior periods is included in the tables below. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP management’s decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP management compensates for those limitations, and the substantive reasons why HP management believes that these non-GAAP measures provide useful information to investors is included under “Use of Non-GAAP Financial Measures” after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for operating profit, operating margin, net earnings, diluted earnings per share, or cash and cash equivalents prepared in accordance with GAAP.
Forward-looking statements
This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections of revenue, margins, expenses, earnings, tax provisions, cash flows, benefit obligations, share repurchases, currency exchange rates, the impact of acquisitions or other financial items; any statements of the plans, strategies and objectives of management for future operations, including the execution of cost reduction programs and restructuring plans; any statements concerning the expected development, performance or market share relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the impact of macroeconomic and geopolitical trends and events; the competitive pressures faced by HP’s businesses; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by HP and its suppliers, customers and partners; the protection of HP’s intellectual property assets, including intellectual property licensed from third parties; integration and other risks associated with business combination and investment transactions; the hiring and retention of key employees; assumptions related to pension and other post-retirement costs; expectations and assumptions relating to the execution and timing of cost reduction programs and restructuring plans; the resolution of pending investigations, claims and disputes; and other risks that are described in HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2010 and HP’s other filings with the Securities and Exchange Commission. As in prior periods, the financial information set forth in this release, including tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts in HP’s Form 10-Q for the quarter ended January 31, 2011. In particular, determining HP’s actual tax balances and provisions as of January 31, 2011 requires extensive internal and external review of tax data (including consolidating and reviewing the tax provisions of numerous domestic and foreign entities), which is being completed in the ordinary course of preparing HP’s Form 10-Q. HP assumes no obligation and does not intend to update these forward-looking statements.
© 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP shall not be liable for technical or editorial errors or omissions contained herein.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS | ||||||||||||
(Unaudited) | ||||||||||||
(In millions except per share amounts) | ||||||||||||
Three months ended | ||||||||||||
January 31,
|
October 31,
|
January 31,
|
||||||||||
Net revenue | $ | 32,302 | $ | 33,278 | $ | 31,177 | ||||||
Costs and Expenses: (a) | ||||||||||||
Cost of sales | 24,408 | 24,995 | 24,027 | |||||||||
Research and development | 798 | 814 | 681 | |||||||||
Selling, general and administrative | 3,090 | 3,464 | 2,967 | |||||||||
Amortization of purchased intangible assets | 425 | 424 | 330 | |||||||||
Restructuring charges | 158 | 235 | 131 | |||||||||
Acquisition-related charges | 29 | 51 | 38 | |||||||||
Total costs and expenses | 28,908 | 29,983 | 28,174 | |||||||||
Earnings from operations | 3,394 | 3,295 | 3,003 | |||||||||
Interest and other, net | (97 | ) | (81 | ) | (199 | ) | ||||||
Earnings before taxes | 3,297 | 3,214 | 2,804 | |||||||||
Provision for taxes | 692 | 676 | 554 | |||||||||
Net earnings | $ | 2,605 | $ | 2,538 | $ | 2,250 | ||||||
Net earnings per share: | ||||||||||||
Basic | $ | 1.19 | $ | 1.13 | $ | 0.95 | ||||||
Diluted | $ | 1.17 | $ | 1.10 | $ | 0.93 | ||||||
Cash dividends declared per share | $ | 0.16 | $ | - | $ | 0.16 | ||||||
Weighted-average shares used to compute net earnings per share: | ||||||||||||
Basic | 2,182 | 2,249 | 2,358 | |||||||||
Diluted | 2,226 | 2,297 | 2,427 | |||||||||
(a) In connection with organizational realignments implemented in the first quarter of fiscal 2011, certain costs previously reported as Costs of Sales have been reclassified as Selling, General and Administrative expenses to better align those costs with the functional areas that benefit from those expenditures. |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS, | ||||||||||||||||||||||||
OPERATING MARGIN AND EARNINGS PER SHARE | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In millions except per share amounts) | ||||||||||||||||||||||||
Three
|
Diluted
|
Three
|
Diluted
|
Three
|
Diluted
|
|||||||||||||||||||
GAAP net earnings | $ | 2,605 | $ | 1.17 | $ | 2,538 | $ | 1.10 | $ | 2,250 | $ | 0.93 | ||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||
Amortization of purchased intangible assets |
425 | 0.19 | 424 | 0.19 | 330 | 0.14 | ||||||||||||||||||
Restructuring charges | 158 | 0.07 | 235 | 0.10 | 131 | 0.05 | ||||||||||||||||||
Acquisition-related charges | 29 | 0.01 | 51 | 0.02 | 38 | 0.01 | ||||||||||||||||||
Adjustments for taxes | (187 | ) | (0.08 | ) | (184 | ) | (0.08 | ) | (155 | ) | (0.06 | ) | ||||||||||||
Non-GAAP net earnings | $ | 3,030 | $ | 1.36 | $ | 3,064 | $ | 1.33 | $ | 2,594 | $ | 1.07 | ||||||||||||
GAAP earnings from operations | $ | 3,394 | $ | 3,295 | $ | 3,003 | ||||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||
Amortization of purchased intangible assets |
425 | 424 | 330 | |||||||||||||||||||||
Restructuring charges | 158 | 235 | 131 | |||||||||||||||||||||
Acquisition-related charges | 29 | 51 | 38 | |||||||||||||||||||||
Non-GAAP earnings | ||||||||||||||||||||||||
from operations | $ | 4,006 | $ | 4,005 | $ | 3,502 | ||||||||||||||||||
GAAP operating margin | 11 | % | 10 | % | 10 | % | ||||||||||||||||||
Non-GAAP adjustments | 1 | % | 2 | % | 1 | % | ||||||||||||||||||
Non-GAAP operating margin | 12 | % | 12 | % | 11 | % |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES | ||||||
CONSOLIDATED CONDENSED BALANCE SHEETS | ||||||
(In millions) | ||||||
January 31,
2011 |
October 31,
2010 |
|||||
(unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 9,934 | $ | 10,929 | ||
Accounts receivable | 16,552 | 18,481 | ||||
Financing receivables | 2,982 | 2,986 | ||||
Inventory | 6,747 | 6,466 | ||||
Other current assets | 15,189 | 15,322 | ||||
Total current assets | 51,404 | 54,184 | ||||
Property, plant and equipment | 11,575 | 11,763 | ||||
Long-term financing receivables and other assets | 11,017 | 12,225 | ||||
Goodwill and purchased intangible assets | 45,937 | 46,331 | ||||
Total assets | $ | 119,933 | $ | 124,503 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Notes payable and short-term borrowings | $ | 3,381 | $ | 7,046 | ||
Accounts payable | 13,453 | 14,365 | ||||
Employee compensation and benefits | 2,976 | 4,256 | ||||
Taxes on earnings | 789 | 802 | ||||
Deferred revenue | 6,927 | 6,727 | ||||
Other accrued liabilities | 16,084 | 16,207 | ||||
Total current liabilities | 43,610 | 49,403 | ||||
Long-term debt | 17,022 | 15,258 | ||||
Other liabilities | 17,754 | 19,061 | ||||
Stockholders' equity: | ||||||
HP stockholders' equity | 41,206 | 40,449 | ||||
Non-controlling interests | 341 | 332 | ||||
Total stockholders' equity | 41,547 | 40,781 | ||||
Total liabilities and stockholders' equity | $ | 119,933 | $ | 124,503 |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES | ||||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
(In millions) | ||||||||
Three months ended | ||||||||
January 31,
2011 |
January 31,
2010 |
|||||||
Cash flows from operating activities: | ||||||||
Net earnings | $ | 2,605 | $ | 2,250 | ||||
Adjustments to reconcile net earnings to
net cash provided by operating activities: |
||||||||
Depreciation and amortization | 1,255 | 1,162 | ||||||
Stock-based compensation expense | 180 | 181 | ||||||
Provision for bad debt and inventory | 86 | 92 | ||||||
Restructuring charges | 158 | 131 | ||||||
Deferred taxes on earnings | 632 | (192 | ) | |||||
Excess tax benefit from stock-based compensation | (64 | ) | (128 | ) | ||||
Other, net | (104 | ) | 87 | |||||
Changes in assets and liabilities: | ||||||||
Accounts and financing receivables | 1,752 | 1,875 | ||||||
Inventory | (333 | ) | (543 | ) | ||||
Accounts payable | (912 | ) | (1,268 | ) | ||||
Taxes on earnings | (242 | ) | 479 | |||||
Restructuring | (272 | ) | (400 | ) | ||||
Other assets and liabilities | (1,671 | ) | (1,319 | ) | ||||
Net cash provided by operating activities | 3,070 | 2,407 | ||||||
Cash flows from investing activities: | ||||||||
Investment in property, plant and equipment | (926 | ) | (821 | ) | ||||
Proceeds from sale of property, plant and equipment | 543 | 112 | ||||||
Purchases of available-for-sale securities and other investments | (19 | ) | (9 | ) | ||||
Maturities and sales of available-for-sale securities and
other investments |
53 | - | ||||||
(Payments) receipts made in connection with business
acquisition, net |
(14 | ) | 7 | |||||
Net cash used in investing activities | (363 | ) | (711 | ) | ||||
Cash flows from financing activities: | ||||||||
(Repayment) issuance of commercial paper and notes payable, net | (3,710 | ) | 78 | |||||
Issuance of debt | 2,117 | 29 | ||||||
Payment of debt | (138 | ) | (80 | ) | ||||
Issuance of common stock under employee stock plans | 430 | 1,319 | ||||||
Repurchase of common stock | (2,290 | ) | (2,713 | ) | ||||
Excess tax benefit from stock-based compensation | 64 | 128 | ||||||
Dividends | (175 | ) | (189 | ) | ||||
Net cash used in financing activities | (3,702 | ) | (1,428 | ) | ||||
(Decrease) increase in cash and cash equivalents | (995 | ) | 268 | |||||
Cash and cash equivalents at beginning of period | 10,929 | 13,279 | ||||||
Cash and cash equivalents at end of period | $ | 9,934 | $ | 13,547 |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES | ||||||||||||||
SEGMENT INFORMATION | ||||||||||||||
(Unaudited) | ||||||||||||||
(In millions) | ||||||||||||||
Three months ended | ||||||||||||||
January 31,
2011 |
October 31,
2010 |
January 31,
2010 |
||||||||||||
Net revenue: (a) | ||||||||||||||
Services | $ | 8,607 | $ | 9,125 | $ | 8,790 | ||||||||
Enterprise Servers, Storage and Networking | 5,634 | 5,888 | 4,610 | |||||||||||
HP Software | 697 | 763 | 663 | |||||||||||
HP Enterprise Business | 14,938 | 15,776 | 14,063 | |||||||||||
Personal Systems Group | 10,449 | 10,283 | 10,584 | |||||||||||
Imaging and Printing Group | 6,630 | 6,995 | 6,206 | |||||||||||
HP Financial Services | 827 | 809 | 719 | |||||||||||
Corporate Investments | 78 | 135 | 60 | |||||||||||
Total Segments | 32,922 | 33,998 | 31,632 | |||||||||||
Eliminations of intersegment net revenue and other | (620 | ) | (720 | ) | (455 | ) | ||||||||
Total HP Consolidated Revenue | $ | 32,302 | $ | 33,278 | $ | 31,177 | ||||||||
Earnings from operations: (a) | ||||||||||||||
Services | $ | 1,375 | $ | 1,500 | $ | 1,379 | ||||||||
Enterprise Servers, Storage and Networking | 828 | 888 | 607 | |||||||||||
HP Software | 123 | 261 | 172 | |||||||||||
HP Enterprise Business | 2,326 | 2,649 | 2,158 | |||||||||||
Personal Systems Group | 672 | 568 | 530 | |||||||||||
Imaging and Printing Group | 1,129 | 1,220 | 1,054 | |||||||||||
HP Financial Services | 79 | 73 | 67 | |||||||||||
Corporate Investments | (183 | ) | (157 | ) | (56 | ) | ||||||||
Total Segments | 4,023 | 4,353 | 3,753 | |||||||||||
Corporate and unallocated costs and eliminations | 149 | (239 | ) | (88 | ) | |||||||||
Unallocated costs related to stock-based compensation expense |
(166 |
) |
(109 | ) | (163 | ) | ||||||||
Amortization of purchased intangible assets | (425 | ) | (424 | ) | (330 | ) | ||||||||
Restructuring charges | (158 | ) | (235 | ) | (131 | ) | ||||||||
Acquisition-related charges | (29 | ) | (51 | ) | (38 | ) | ||||||||
Interest and other, net | (97 | ) | (81 | ) | (199 | ) | ||||||||
Total HP Consolidated Earnings Before Taxes | $ | 3,297 | $ | 3,214 | $ | 2,804 | ||||||||
(a) | Certain fiscal 2011 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2010, the reclassifications resulted in the transfer of revenue and operating profit among the Enterprise Servers, Storage and Networking, Services, HP Software and Corporate Investments financial reporting segments. Reclassifications between segments included the transfer of the networking business from Corporate Investments to Enterprise Servers, Storage and Networking, the transfer of the communications and media solutions business from HP Software to Services, and the transfer of the business intelligence business from HP Software to Corporate Investments. There was no impact on the previously reported financial results for the Personal Systems Group, HP Financial Services and Imaging and Printing Group segments. |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES | ||||||||||||||
SEGMENT / BUSINESS UNIT INFORMATION | ||||||||||||||
(Unaudited) | ||||||||||||||
(In millions) | ||||||||||||||
Three months ended | ||||||||||||||
January 31,
2011 |
October 31,
2010 |
January 31,
2010 |
||||||||||||
Net revenue: (a) | ||||||||||||||
Infrastructure Technology Outsourcing | $ | 3,636 | $ | 3,851 | $ | 3,675 | ||||||||
Technology Services | 2,602 | 2,733 | 2,631 | |||||||||||
Application Services | 1,632 | 1,763 | 1,681 | |||||||||||
Business Process Outsourcing | 658 | 695 | 734 | |||||||||||
Other | 79 | 83 | 69 | |||||||||||
Services | 8,607 | 9,125 | 8,790 | |||||||||||
Industry Standard Servers | 3,448 | 3,530 | 2,946 | |||||||||||
Storage | 1,012 | 1,044 | 889 | |||||||||||
Business Critical Systems | 555 | 695 | 556 | |||||||||||
HP Networking (b) | 619 | 619 | 219 | |||||||||||
Enterprise Servers, Storage and Networking | 5,634 | 5,888 | 4,610 | |||||||||||
HP Software (c) | 697 | 763 | 663 | |||||||||||
HP Enterprise Business | 14,938 | 15,776 | 14,063 | |||||||||||
Notebooks | 5,808 | 5,623 | 6,138 | |||||||||||
Desktops | 3,896 | 3,928 | 3,853 | |||||||||||
Workstations | 535 | 529 | 375 | |||||||||||
Other | 210 | 203 | 218 | |||||||||||
Personal Systems Group (d) | 10,449 | 10,283 | 10,584 | |||||||||||
Supplies | 4,358 | 4,707 | 4,081 | |||||||||||
Commercial Hardware | 1,464 | 1,541 | 1,291 | |||||||||||
Consumer Hardware | 808 | 747 | 834 | |||||||||||
Imaging and Printing Group | 6,630 | 6,995 | 6,206 | |||||||||||
HP Financial Services | 827 | 809 | 719 | |||||||||||
Corporate Investments | 78 | 135 | 60 | |||||||||||
Total Segments | 32,922 | 33,998 | 31,632 | |||||||||||
Eliminations of intersegment net revenue
|
(620 | ) | (720 | ) | (455 | ) | ||||||||
Total HP Consolidated Revenue | $ | 32,302 | $ | 33,278 | $ | 31,177 | ||||||||
(a) |
Certain fiscal 2011 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2010, the reclassifications resulted in the transfer of revenue among the Enterprise Servers, Storage and Networking, Services, HP Software and Corporate Investments financial reporting segments. Reclassifications between segments included the transfer of the networking business from Corporate Investments to Enterprise Servers, Storage and Networking, the transfer of the communications and media solutions business from HP Software to Services, and the transfer of the business intelligence business from HP Software to Corporate Investments. In addition, revenue was transferred among the business units within the Services and Personal Systems Group segments. There was no impact on the previously reported financial results for the HP Financial Services and Imaging and Printing Group segments or for the business units within the Imaging and Printing Group segment. |
|||||||||||||
(b) | The networking business was added to the Enterprise Servers, Storage and Networking segment in fiscal 2011. | |||||||||||||
(c) | The Business Technology Optimization and Other Software business units were consolidated into a single business unit within the HP Software segment in fiscal 2011. | |||||||||||||
(d) | The Handhelds business unit, which includes devices that run on Windows Mobile software, was reclassified into the Other business unit within the Personal Systems Group in fiscal 2011. |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES | ||||||||||||
SEGMENT REVENUE SUMMARY DATA | ||||||||||||
(Unaudited) | ||||||||||||
(In millions) | ||||||||||||
Three
|
Revenue growth rate (%) | |||||||||||
January 31,
|
Y/Y | Q/Q | ||||||||||
Net revenue: (a) | ||||||||||||
Infrastructure Technology Outsourcing | $ | 3,636 | (1 | %) | (6 | %) | ||||||
Technology Services | 2,602 | (1 | %) | (5 | %) | |||||||
Application Services | 1,632 | (3 | %) | (7 | %) | |||||||
Business Process Outsourcing | 658 | (10 | %) | (5 | %) | |||||||
Other | 79 | 14 | % | (5 | %) | |||||||
Services | 8,607 | (2 | %) | (6 | %) | |||||||
Industry Standard Servers | 3,448 | 17 | % | (2 | %) | |||||||
Storage | 1,012 | 14 | % | (3 | %) | |||||||
Business Critical Systems | 555 | 0 | % | (20 | %) | |||||||
HP Networking | 619 | 183 | % | 0 | % | |||||||
Enterprise Servers, Storage and Networking | 5,634 | 22 | % | (4 | %) | |||||||
HP Software | 697 | 5 | % | (9 | %) | |||||||
HP Enterprise Business | 14,938 | 6 | % | (5 | %) | |||||||
Notebooks | 5,808 | (5 | %) | 3 | % | |||||||
Desktops | 3,896 | 1 | % | (1 | %) | |||||||
Workstations | 535 | 43 | % | 1 | % | |||||||
Other | 210 | (4 | %) | 3 | % | |||||||
Personal Systems Group | 10,449 | (1 | %) | 2 | % | |||||||
Supplies | 4,358 | 7 | % | (7 | %) | |||||||
Commercial Hardware | 1,464 | 13 | % | (5 | %) | |||||||
Consumer Hardware | 808 | (3 | %) | 8 | % | |||||||
Imaging and Printing Group | 6,630 | 7 | % | (5 | %) | |||||||
HP Financial Services | 827 | 15 | % | 2 | % | |||||||
Corporate Investments | 78 | 30 | % | (42 | %) | |||||||
Total Segments | 32,922 | 4 | % | (3 | %) | |||||||
Eliminations of intersegment net revenue and other | (620 | ) | 36 | % | (14 | %) | ||||||
Total HP Consolidated Revenue | $ | 32,302 | 4 | % | (3 | %) | ||||||
(a) | Certain fiscal 2011 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2010, the reclassifications resulted in the transfer of revenue among the Enterprise Servers, Storage and Networking, Services, HP Software and Corporate Investments financial reporting segments. Reclassifications between segments included the transfer of the networking business from Corporate Investments to Enterprise Servers, Storage and Networking, the transfer of the communications and media solutions business from HP Software to Services, and the transfer of the business intelligence business from HP Software to Corporate Investments. In addition, revenue was transferred among the business units within the Services and Personal Systems Group segments. There was no impact on the previously reported financial results for the HP Financial Services and Imaging and Printing Group segments or for the business units within the Imaging and Printing Group segment. |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES | |||||||||
SEGMENT NON-GAAP OPERATING MARGIN SUMMARY DATA | |||||||||
(Unaudited) | |||||||||
Three months
|
Change in Operating Margin (pts) | ||||||||
January 31,
2011 |
Y/Y | Q/Q | |||||||
Non-GAAP Operating Margin: (a) | |||||||||
Services | 16.0 | % | 0.3 pts | (0.4 pts) | |||||
Enterprise Servers, Storage and Networking | 14.7 | % | 1.5 pts | (0.4 pts) | |||||
HP Software | 17.6 | % | (8.3 pts) | (16.6 pts) | |||||
HP Enterprise Business | 15.6 | % | 0.3 pts | (1.2 pts) | |||||
Personal Systems Group | 6.4 | % | 1.4 pts | 0.9 pts | |||||
Imaging and Printing Group | 17.0 | % | 0.0 pts | (0.4 pts) | |||||
HP Financial Services | 9.6 | % | 0.3 pts | 0.6 pts | |||||
Corporate Investments | (234.6 | %) | (141.3 pts) | (118.3 pts) | |||||
Total Segments | 12.2 | % | 0.3 pts | (0.6 pts) | |||||
Total HP Consolidated Non-GAAP Operating Margin | 12.4 | % | 1.2 pts | 0.4 pts | |||||
(a) | Certain fiscal 2011 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2010, the reclassifications resulted in the transfer of revenue and operating profit among the Enterprise Servers, Storage and Networking, Services, HP Software and Corporate Investments financial reporting segments. Reclassifications between segments included the transfer of the networking business from Corporate Investments to Enterprise Servers, Storage and Networking, the transfer of the communications and media solutions business from HP Software to Services, and the transfer of the business intelligence business from HP Software to Corporate Investments. There was no impact on the previously reported financial results for the Personal Systems Group, HP Financial Services and Imaging and Printing Group segments. |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES | |||||||||||
CALCULATION OF NET EARNINGS PER SHARE | |||||||||||
(Unaudited) | |||||||||||
(In millions except per share amounts) | |||||||||||
Three months ended | |||||||||||
January
|
October
|
January
|
|||||||||
Numerator: | |||||||||||
Net earnings | $ | 2,605 | $ | 2,538 | $ | 2,250 | |||||
Denominator: | |||||||||||
Weighted-average shares used to compute basic EPS | 2,182 | 2,249 | 2,358 | ||||||||
Dilutive effect of employee stock plans | 44 | 48 | 69 | ||||||||
Weighted-average shares used to compute diluted EPS | 2,226 | 2,297 | 2,427 | ||||||||
Net earnings per share: | |||||||||||
Basic (a) | $ | 1.19 | $ | 1.13 | $ | 0.95 | |||||
Diluted (b) | $ | 1.17 | $ | 1.10 | $ | 0.93 | |||||
(a) | Basic earnings per share was calculated based on net earnings and the weighted-average number of shares outstanding during the reporting period. | ||||||||||
(b) | Diluted earnings per share included any dilutive effect of outstanding stock options, performance-based restricted units, restricted stock units and restricted stock. |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES | |||||||||||
CALCULATION OF NON-GAAP NET EARNINGS PER SHARE | |||||||||||
(Unaudited) | |||||||||||
(In millions except per share amounts) | |||||||||||
Three months ended | |||||||||||
January
|
October
|
January
|
|||||||||
Numerator: | |||||||||||
Non-GAAP net earnings | $ | 3,030 | $ | 3,064 | $ | 2,594 | |||||
Denominator: | |||||||||||
Weighted-average shares used to compute basic EPS | 2,182 | 2,249 | 2,358 | ||||||||
Dilutive effect of employee stock plans | 44 | 48 | 69 | ||||||||
Weighted-average shares used to compute diluted EPS | 2,226 | 2,297 | 2,427 | ||||||||
Non-GAAP net earnings per share: | |||||||||||
Basic (a) | $ | 1.39 | $ | 1.36 | $ | 1.10 | |||||
Diluted (b) | $ | 1.36 | $ | 1.33 | $ | 1.07 | |||||
(a) | Basic non-GAAP earnings per share was calculated based on non-GAAP net earnings and the weighted-average number of shares outstanding during the reporting period. | ||||||||||
(b) | Diluted non-GAAP earnings per share included any dilutive effect of outstanding stock options, performance-based restricted units, restricted stock units and restricted stock. |
Use of Non-GAAP Financial Measures