HP: Fiscal 2Q08 Financial Results

Enterprise storage and servers

(Source: HP)

Storage products only

(Source: HP)

Above are the financial results of the HP’s Enterprise Storage and Servers (ESS) business unit a well as its storage segment. Services are not included as they are a part of another unit. 2Q08 ended on April 30, 2008. ESS represented 22% of the total revenue of the company.

Commenting on 2Q08 period, HP stated: "Enterprise Storage and Servers (ESS) reported revenue of $4.8 billion, up 4% over the prior year period fueled by ESS blades, which grew 68%, and storage, which grew 14%. Storage revenue growth was fueled by the high-end XP line, which grew 21%, and the midrange EVA line, which grew 17%. On a year-over-year basis, Industry Standard Server revenue was flat. Business Critical Systems revenue increased 7%. Operating profit was $655 million, or 13.7% of revenue, up from $452 million, or 9.8% of revenue, in the prior-year period."

During a conference call dated May 20, 2008, the following question was asked by Bill Fearnley, an analyst of FTN Midwest: "I’d like to switch gears, if I could, to storage. Mark, how do you rate your storage? Have you turned a corner here, and are you gaining new customers?"

The answer of HP’s chairman, president and CEO Mark Hurd:" So, Bill, good question. I think it’s a lot better. So I’m happier, so I just give you an incremental metric. On an absolute basis, listen, we can just do better than this. We’ve got new product we’ve announced into the market during the quarter, in the storage space, that we’re excited about. We’ve begun to bring together some of the acquisitions we’ve done and align some of our storage essential software with our platforms. We’re doing more work in the channel, and it turned into good growth. For us to get mid-double-digit growth or 14% growth in the quarter is better than we’ve seen. What I’d tell you, that if there’s anybody taking a lap around the building, I sure haven’t seen them, because we’ve got a lot more work to do to be a participant in the way that HP ought to be a participant in the storage market. So I think it’s good, and the good news is we’re getting it done with good old-fashioned blocking and tackling. There are net new customers in addition to us being able to upsell and cross-sell into our base. We’ve really got to, Bill, do a better job integrating our channel partners’ go-to-market, because we obviously, as you know, we’ve got a tremendous server channel support. Getting that same support on the storage side in many of the same partners is important for us."