HP: Fiscal 2Q14 Financial Results

For the fiscal first quarter ended April 30, 2014, HP storage hardware represented $808 million, a figure down 6% Y/Y and 3% Q/Q as “as customers appeared to pause to assess new products and market innovations,” explained CEO Meg Whitman.

$808 million is the worst number since at least 3Q09. The descent continues inexorably for the storage business at HP and we don’t see any huge restructuration engaged to change this horrible trend.

“We’ve invested in additional storage sale specialists, but these take time to ramp to full productivity. Overall we remain very confident in our storage business. We believe our converged storage portfolio is well positioned to address shifting market forces with products like 3Par, Store Virtual and Store Once,” said Whitman.

Converged revenue was $338 million, down 3% Y/Y, and traditional revenue $470 million, down 8% Y/Y. 3Par plus EVA, plus XP also declined.

Storage was 12% of quarterly revenue of the global Enterprise Group with revenue declining here 2% over the prior year, driven by lower technology services and storage revenue as well as the decline in business critical systems.

3par continue to be the most successful segment for HP storage. Since the 3par acquisition for  $2,35 billion in September 2010, revenue of total storage of HP (including 3Par) was $10.9 billion for hardware only.

Whitman added: “While it’s clear we aren’t alone in experiencing weakness in the storage market we also have an opportunity to improve execution particularly in the U.S. We still expect converge storage to become greater than half of all storage revenue later this year but we expect 2Q14 results to pressure overall storage revenue for the full year.”

“Overall, we remain very confident in our storage business,” concluded Whitman.

We don’t.

Revenue for storage only
(without services, $ million)