HP: Fiscal 2Q12 Financial Results

Storage products only
(without software and services)

(in $ million)	2Q11	1Q12	2Q12
Revenues	980	955	990
*Q/Q growth*			4%
Y/Y growth			1%

HP announced its financial results for second fiscal quarter ended April 30, 2012.

You can presume that it’s an advantage for a company like HP to have into its portfolio servers AND storage to offer a complete bundle at a better price for the users than dealing with two firms for their global configuration.

It’s not the case today in the storage industry. Among the biggest ones, the fastest growing in storage are EMC, HDS (Hitachi being a modest server actor) and NetApp without servers’ offering. EMC and NetApp never wanted to enter into the server market even if EMC has some relationship with Cisco in this field.

On its side, HP, number one server vendor in units shipped, IBM number one in revenues, Dell number two in shipments, all of them record poor storage results for their last financial quarter:

storage hardware down 4% Y/Y for IBM
total storage revenues decreased 8% Y/Y for Dell
storage products up only 1% Y/Y for HP.

HP registers $1,945 million in storage revenues (without software and services) for the six month ended April 2012, a figure down 2% from the same period one year ago. At the same time, sales for its entire enterprise servers, storage and networking are also decreasing, 8%, at $10,229 million with an 11.2% operating margin.

Catherine Lesjak, HP CFO, said in conference call following last quarter’s results: "Storage revenue was up 1% year-over-year, with external disk revenue up 8%. StoreOnce revenue was up almost 100% and 3PAR revenue grew by more than 100%, surpassing EVA in size and making it our largest array business. In fact, combined, EVA and 3PAR grew 19% year-over-year. This growth was somewhat offset by declines in the non-disk businesses, including tape."

For Margaret Whitman, HP president and CEO, EVA is also declining. But this product line has been recently updated.

She also commented: "In industry standard servers, the HDD shortage was still a factor and we had a tough quarter."