SAN JOSE, CA--(Marketwired - Oct 9, 2013) - HP (
Today at HP's 2013 Securities Analyst Meeting, the company's leadership team provided an update on HP's progress executing against its turnaround plan and future strategy.
HP's president and chief executive officer Meg Whitman reviewed the accomplishments of the past year -- a "fix and rebuild" year -- noting that the multi-year turnaround remains broadly on track. In particular, the company:
"While there is a lot more work to be done, I am confident about the progress we are making," said Whitman. "We're producing tangible results, strengthening our balance sheet and delivering innovative products across all our key segments. We are implementing the changes needed to support our multi-year turnaround journey, reaffirm HP's leadership position, and create enduring value for customers as well as for our shareholders."
The core of HP's strategy is focused on providing unique technology solutions for the "New Style of IT." HP has the combination of hardware, software, scale and innovation to provide the integrated solutions that help customers realize the full benefits of cloud, security, big data and mobility.
While the company faces a challenging macro environment, shifting market forces and a rapidly changing competitive landscape, Whitman emphasized that the company has the right leadership team in place to advance its strategy, drive innovation across the business and improve its go-to-market execution. Whitman reiterated that she expects HP's revenues to grow in line with gross domestic product (GDP) over the long term.
2014 outlook
Cathie Lesjak, HP's executive vice president and chief financial officer, provided a financial outlook for fiscal 2014. With pockets of growth helping to offset continuing challenges in the macro environment and weak public sector spending, HP expects the year-over-year revenue decline in fiscal 2014 will moderate from fiscal 2013.
HP anticipates operating profit dollars to be flat to up year-over-year in fiscal 2014, due to its continued focus on cost savings and operational efficiency. The company estimates non-GAAP diluted EPS for fiscal 2014 to be in the range of $3.55 to $3.75. HP estimates GAAP diluted EPS to be in the range of $2.85 to $3.05 for fiscal 2014. Fiscal 2014 non-GAAP diluted EPS estimates exclude after-tax costs related primarily to the amortization of purchased intangible assets and a restructuring charge of approximately $0.8 billion.
HP expects to generate approximately $9 billion to $9.5 billion in cash flow from operations in fiscal 2014. After deducting estimated fiscal 2014 capital expenditures, the company anticipates free cash flow of $6 billion to $6.5 billion in fiscal 2014.
Lesjak articulated the company's long-term commitment to financial discipline and a returns-based capital allocation strategy. In fiscal 2014, the company is expecting to return at least 50% of free cash flow to shareholders through dividends and share repurchases.
In addition, HP will invest in its product portfolio to accelerate high-growth areas in the New Style of IT. HP plans to reinvest approximately $0.12 per share of savings from its restructuring program into the business in fiscal 2014, including products and solutions such as 3PAR, networking, Vertica and cloud solutions.
A copy of Lesjak's presentation materials accompanies this release.
Business segment strategies
Over the course of the day, HP's management team also laid out updated strategies for the company's business segments, including:
Printing and Personal Systems
Enterprise Group
Enterprise Services
Software
Webcast details
A webcast of today's event, along with management presentations and other materials, is available at www.hp.com/investor/SAM2013. This press release contains only a summary of some of the information being presented at today's event and should be read in conjunction with the management presentations and other materials made available on that website.
About HP
HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. With the broadest technology portfolio spanning printing, personal systems, software, services and IT infrastructure, HP delivers solutions for customers' most complex challenges in every region of the world. More information about HP is available at http://www.hp.com.
Use of non-GAAP financial information
To supplement HP's historical and forecasted financial results presented on a GAAP basis, HP provides non-GAAP diluted earnings per share and free cash flow. Non-GAAP diluted earnings per share is defined to exclude the effects of amortization of purchased intangible assets, acquisition-related charges or restructuring charges recorded during the relevant period. In addition, non-GAAP diluted earnings per share is adjusted by the amount of additional taxes or tax benefits associated with each non-GAAP item. Free cash flow is defined as cash flow from operations less net capital expenditures. HP's management uses non-GAAP diluted earnings per share for purposes of evaluating and forecasting HP's financial performance. HP's management uses free cash flow for purposes of determining the amount of cash available for investment in HP's businesses, funding acquisitions, repurchasing stock and other purposes. HP believes that providing non-GAAP diluted earnings per share and free cash flow to investors in addition to the related GAAP measures provides investors with greater transparency to the information used by HP's management in its financial and operational decision-making and allows investors to see HP's results and expected future financial performance "through the eyes" of management. Non-GAAP diluted earnings per share and free cash flow may have limitations as analytical tools, and this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for diluted earnings per share and cash flow from operations prepared in accordance with GAAP.
Forward-looking statements
This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections of revenue, margins, expenses, earnings, earnings per share, tax provisions, cash flows, benefit obligations, share repurchases, currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring charges; any statements of the plans, strategies and objectives of management for future operations, including the execution of restructuring plans and any resulting cost savings or revenue or profitability improvements; any statements concerning the expected development, performance, market share or competitive performance relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the need to address the many challenges facing HP's businesses; the competitive pressures faced by HP's businesses; risks associated with executing HP's strategy; the impact of macroeconomic and geopolitical trends and events; the need to manage third-party suppliers and the distribution of HP's products and services effectively; the protection of HP's intellectual property assets, including intellectual property licensed from third parties; risks associated with HP's international operations; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by HP and its suppliers, customers and partners; the hiring and retention of key employees; integration and other risks associated with business combination and investment transactions; the execution, timing and results of restructuring plans, including estimates and assumptions related to the cost and the anticipated benefits of implementing those plans; the resolution of pending investigations, claims and disputes and other risks that are described in HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2012 and HP's other filings with the Securities and Exchange Commission, including HP's Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2013. HP assumes no obligation and does not intend to update these forward-looking statements.
© 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP shall not be liable for technical or editorial errors or omissions contained herein.