HP today announced financial results for its fiscal 2015 first quarter ended 31 January 2015, with net revenue of $26,8-billion down 5% from the prior-year period and down 2% on a constant currency basis.
First quarter GAAP diluted net earnings per share (EPS) was $0.73, down from $0.74 in the prior-year period and within its previously provided outlook of $0.72 to $0.76. First quarter non-GAAP diluted net EPS was $0.92, up from $0.90 in the prior-year period and within its previously provided outlook of $0.89 to $0.93.
First quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $339 million and $0.19 per diluted share, respectively, related to the amortisation of intangible assets, restructuring charges, separation costs, and acquisition-related charges.
“With the first quarter of fiscal 2015 now behind us, the HP turnaround remains on track,” said Meg Whitman, chairman, president and CEO of HP. “We grew operating profit margins across all of our major business segments, increased investment in innovation, and executed well across key areas of our portfolio and in our separation activities. Our progress continues as we head into Q2.”
The US dollar has strengthened considerably since HP last provided an FY15 outlook in November, 2014. As is the case with many US based companies, this currency challenge is having a significant impact on HP’s financial outlook.
For the fiscal 2015 second quarter, HP estimates non-GAAP diluted net EPS to be in the range of $0.84 to $0.88, reflecting an estimated currency impact of $0.09. HP expects GAAP diluted net EPS to be in the range of $0.57 to $0.61, reflecting an estimated currency impact of $0.09.
Fiscal 2015 second quarter non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.27 per share, related to separation costs, the amortisation of intangible assets, restructuring charges and acquisition-related charges.
For fiscal 2015, HP estimates non-GAAP diluted net EPS to be in the range of $3.53 to $3.73, reflecting an estimated currency impact of $0.30. Absent the impact of currency, the range is in line with HP’s prior forecast.
HP expects GAAP diluted net EPS to be in the range of $2.03 to $2.23, reflecting an estimated currency impact of $0.30. Fiscal 2015 non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $1.50 per share, related to separation costs, the amortisation of intangible assets, restructuring charges and acquisition-related charges.
“While we were able to manage the impact of currency in the quarter and deliver earnings as expected, we believe the impact on FY15 will be significantly greater than we anticipated in November,” Whitman adds. “We’ll work hard to offset these impacts through re-pricing and productivity, but fully mitigating currency movements of this size would require reducing investments and mortgaging our future. We won’t do that.”
