Full year fiscal 2008
Net revenue for the full fiscal year was $118.4 billion, representing growth of 13% or 8% when adjusted for the effects of currency. GAAP operating profit was $10.5 billion and GAAP diluted EPS was $3.25, up from $2.68 in the prior year. Non-GAAP operating profit was $11.8 billion, with non-GAAP diluted EPS of $3.62, up from $2.93 in the prior year. Non-GAAP financial information excludes $973 million of adjustments on an after-tax basis, or $0.37 per diluted share, related primarily to the amortization of purchased intangible assets, restructuring charges, acquisition-related charges and in-process research and development charges.
Outlook
In providing its outlook for the first fiscal quarter and full year 2009, the company has taken into consideration the current challenging economic environment and the relative strength of the U.S. dollar. Based on current exchange rates, the company now expects an unfavorable year-over-year currency impact on revenue of approximately 5 percentage points in the first quarter and roughly 6-7 percentage points for the full fiscal year and this impact is reflected in its outlook.
For the first fiscal quarter of 2009, HP expects revenue of approximately $32.0 billion to $32.5 billion, GAAP diluted EPS in the range of $0.80 to $0.82, and non-GAAP diluted EPS in the range of $0.93 to $0.95. Q109 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.13 per share, related primarily to the amortization of purchased intangibles.
For the full fiscal year 2009, HP expects revenue of approximately $127.5 billion to $130.0 billion, GAAP diluted EPS in the range of $3.38 to $3.53, and non-GAAP diluted EPS in the range of $3.88 to $4.03. FY09 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.50 per share, related primarily to the amortization of purchased intangibles.
More information on HP’s quarterly earnings, including additional financial analysis and an earnings overview presentation, is available on HP’s Investor Relations website at www.hp.com/investor/home.
HP’s Q4 FY08 earnings conference call is accessible via an audio webcast at www.hp.com/investor/q42008webcast.
About HP
HP, the world’s largest technology company, provides printing and personal computing products and IT services, software and solutions that simplify the technology experience for consumers and businesses. HP completed its acquisition of EDS on Aug. 26, 2008. More information about HP is available at http://www.hp.com/.
Use of non-GAAP financial information
To supplement HP’s consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter and prior periods is included in the tables below. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP management’s decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP management compensates for those limitations, and the substantive reasons why HP management believes that these non-GAAP measures provide useful information to investors is included under “Use of Non-GAAP Financial Measures” after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for operating profit, operating margin, net earnings, diluted earnings per share, or cash and cash equivalents 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, tax provisions, cash flows,
benefit obligations, share repurchases, acquisition synergies, currency
exchange rates or other financial items; any statements of the plans,
strategies, and objectives of management for future operations,
including execution of cost reduction programs and restructuring and
integration plans; any statements concerning the expected development,
performance or market share relating to products or services; any
statements regarding 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 macroeconomic and geopolitical trends and events; execution and
performance of contracts by HP and its suppliers, customers and
partners; the challenge of managing asset levels, including inventory;
the difficulty of aligning expense levels with revenue changes;
assumptions related to pension and other post-retirement costs;
expectations and assumptions relating to the execution and timing of
cost reduction programs and restructuring and integration plans; the
possibility that the expected benefits of business combination
transactions may not materialize as expected; 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,
2007 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, 2008. As in prior periods, the financial information set
forth in this release, including tax-related items, reflects estimates
based on information available at this time. While HP believes these
estimates to be meaningful, these amounts could differ materially from
actual reported amounts in HP’s Annual Report on Form 10-K for the
fiscal year ended October 31, 2008. In particular, determining HP’s
actual tax balances and provisions as of October 31, 2008 requires
extensive internal and external review of tax data (including
consolidating and reviewing the tax provisions of numerous domestic and
foreign entities), which is being completed in the ordinary course of
preparing HP’s Form 10-K. HP assumes no obligation and does not intend
to update these forward-looking statements.
