Hewlett Packard 4Q14 Earnings Call Notes

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Each week I read dozens of transcripts from earnings calls and presentations as part of my investment process. Below are some of the most important quotes about the economy and industry trends from the transcripts that I read this week. Full notes can be found here.

Revenue impacted by currency

“here are couple of factors that had an impact on our first quarter financial results and how we think about the rest of the year, and I want to address these. Let me talk for a moment about the global environment with the particular focus on unfavorable currency movements.”

“Our revenue declined approximately 5% year-over-year as reported, but only 2% in constant currency”

Weaker yen means competitors can be more aggressive with price

“The weaker again helps the cost side of our business, but it also allows our Japanese competitors to price much more aggressively. In addition, printing specifically the laser business is overweight in Russia, which has it had another dimension to currency impacts.”

30c hit to guidance thanks to currency

“With all that in mind, we are updating fiscal 2015 non-GAAP diluted net earnings per share outlook to be $3.53 to $3.73 which is lower by $0.30 due to currency headwinds.”

Long sales cycle business

“As you know this is a long sales cycle business. I think we first engaged with Deutsche Bank over 18 months ago maybe even closer to two years. ‘

PC market outlook

“I think in January we’re pretty aligned with the industry projections of the personal systems market, we’d suggest sort of low single digit growth. We believe that PC units will be in small decline, but there are pockets of growth across the segments, in some segments including mobility, accessories and services. We have seen an expected slowdown in the commercial segment following the XP refresh that fueled high growth last year. However, we’ve seen to counter balance that momentum in the consumer side of the business as consumers refresh their older PCs.”

Bullish on servers

“The combination of Gen9 and the refresh cycle makes us fairly bullish on industry standard servers kind of throughout the rest of 2015”