Hewlett Packard 2Q14 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Revenue grew for the first time in 3 years

” For the first time in three years, the company delivered top line revenue growth on a year-over-year basis. Revenue for the company was $27.6 billion, up 1%. As I’ve said many times before, turnarounds are not linear and we face some tough comparisons in the fourth quarter but overall I continue to be very encouraged by the progress we’re making.”

Whitman now going to be dual CEO/chair

” HP’s Board of Directors decided to combine the roles of Chairman and CEO, and I’m honored that they’ve asked me to assume this responsibility. I believe this will help us lead more effectively through the turnaround. Let me reassure everyone that board and I remain fervently committed to the strong practices and financial disciplines we’ve put in place during the past three years. The best interest of our investors are always top of mind with me and the HP board.”

The windows XP expiration is probably over

” The windows XP expiration has contributed to our growth, although we believe we’re now through much of that benefit. However, our product lineup, driven by products like our Elite Book series and our X-360 convertible notebook is the strongest we had in years, and we continue to see customers looking to refresh their aging install base”

Server business doing well–capitalizing on confusion over IBM-Lenovo deal

” In Industry Standard Servers, we saw 9% growth from the prior year period, which represents our fourth consecutive quarter of revenue growth. And we expect to take almost a point of share in the second calendar quarter. We’re seeing good early traction with service providers, as a result of our partnership with Foxconn to produce a line of cloud-optimized servers and we moved aggressively to take advantage of the uncertainty customers feel about the IBM-Lenovo transaction”

Consumer sales up 8% in personal systems

” Personal Systems had an excellent quarter across all businesses, with revenue up 12% year-over-year to $8.6 billion, gaining share across the board. Commercial sales grew 14% year-over-year, with consumer sales up 8% and strength broadly across all of the regions, outside of pockets of weakness in Russia and China.”

PC business is flat to slightly declining

“The PC business is flat to declining slightly and we think that that will continue. However, what we do believe is we can continue to gain share in a relatively flat market and that’s because we got a terrific product lineup”

PC was strong across the board except for China and Russia. China was strong in other areas though

“with regard to PC strength regionally this was broad based across all regions, Americas and EMEA in particular had good quarters. China was a little weaker for us in PCs, Russia was tough for us across the board. But what I will say is China for HP as a whole was actually a pretty good performance. Servers did very well, our Printing business did very well there. Our software business did quite well there. So, China was only a weak spot in the PC area”

US PCs up double digits

“So if you look at PCs, in Americas up in local currency double digits. That was led by very strong performance in the U.S., again double digit performance. EMEA had double digit performance growth as well and that was heavily led by the UK with double digits, Germany, double digits, and to a lesser extent, Italy. And then APJ was up high single digits. So we really had broad based strong performance in PCs.”

Upgrade cycle in windows 2003 servers

“. We think the windows Server 2003 upgrade is an opportunity for us. There’s a significant number of Servers in the install base and they are going to have to upgrade. So there is some similarity between the XP upgrade and the server upgrade but and so we are following the same program from a marketing perspective”