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HP Reports Fourth Quarter 2007 Results
    --  Fourth quarter net revenue up 15%, or $3.7 billion, from a
        year earlier to $28.3 billion

    --  Fiscal 2007 net revenue up 14%, or $12.6 billion, to $104.3
        billion

    --  Fourth quarter GAAP operating profit up 38% to $2.6 billion;
        $0.81 earnings per share, up from $0.60 a year earlier

    --  Fourth quarter non-GAAP operating profit up 27% to $2.8
        billion; $0.86 earnings per share, up from $0.68 a year
        earlier

    --  HP Board of Directors approves $8 billion in share repurchase
        authorization

PALO ALTO, Calif.--(BUSINESS WIRE)--Nov. 19, 2007--HP (NYSE:HPQ) today announced financial results for its fourth fiscal quarter ended Oct. 31, 2007, with net revenue of $28.3 billion, up 15% from a year earlier and up 11% when adjusted for the effects of currency.

In the fourth quarter, GAAP operating profit was $2.6 billion and GAAP diluted earnings per share (EPS) was $0.81, up from $0.60 in the prior-year period. Non-GAAP operating profit was $2.8 billion, with non-GAAP diluted EPS of $0.86 up from $0.68 in the prior-year period. Non-GAAP financial information excludes $132 million of adjustments on an after-tax basis, or $0.05 per diluted share, related primarily to amortization of purchased intangibles. GAAP and non-GAAP financial information include all stock-based compensation expense in both current and prior-year periods.

"Strong performance across our businesses was highlighted by sharp improvement in our software segment," said Mark Hurd, HP chairman and chief executive officer. "We have added over $12 billion of new revenue this year. While we still have more work to do, HP is well positioned to make further progress in the marketplace."


                       ------ ------ -------  ------- -------- -------
                        Q4     Q4
                        FY07   FY06    Y/Y     FY07     FY06     Y/Y
---------------------- ------ ------ -------  ------- -------- -------
Net revenue ($B)       $28.3  $24.6      15%  $104.3  $  91.7   14%
---------------------- ------ ------ -------  ------- -------- -------
GAAP operating margin    9.3%   7.7% 1.6 pts     8.4%     7.2% 1.2 pts
---------------------- ------ ------ -------  ------- -------- -------
GAAP net earnings ($B) $ 2.2  $ 1.7      28%  $  7.3  $   6.2   17%
---------------------- ------ ------ -------  ------- -------- -------
GAAP diluted EPS       $0.81  $0.60      35%  $ 2.68  $  2.18   23%
---------------------- ------ ------ -------  ------- -------- -------
Non-GAAP operating
 margin                  9.9%   9.0% 0.9 pts     9.2%     8.0% 1.2 pts
---------------------- ------ ------ -------  ------- -------- -------
Non-GAAP net earnings
 ($B)                  $ 2.3  $ 1.9      21%  $  8.0  $   6.8   17%
---------------------- ------ ------ -------  ------- -------- -------
Non-GAAP diluted EPS   $0.86  $0.68      26%  $ 2.93  $2.38(a)  23%(a)
---------------------- ------ ------ -------  ------- -------- -------
(a) Note: excluding a favorable tax settlement in Q206, Y/Y EPS growth
 was 32%

Information about HP's use of non-GAAP financial information is provided under "Use of non-GAAP financial information" below.

Revenue in the Americas grew 10% on a year-over-year basis to $11.9 billion. Revenue grew 19% in Europe, the Middle East and Africa to $11.6 billion. Revenue grew 20% in Asia Pacific to $4.8 billion. When adjusted for the effects of currency, revenue in the Americas grew 9%, revenue in Europe, the Middle East and Africa grew 12%, and revenue in Asia Pacific grew 14%. Revenue from outside of the United States in the fourth quarter was 67%, with revenue in the BRIC countries (Brazil, Russia, India and China) growing 37% over the prior-year period and accounting for 9% of total revenue.

Personal Systems Group

Personal Systems Group (PSG) revenue grew 30% year over year to $10.1 billion, with unit shipments up 31% on a year-over-year basis. This fiscal year, PSG grew $7.2 billion in revenue. Notebook revenue for the quarter grew 49% over the prior-year period, while desktop revenue grew 15%. Commercial client revenue grew 24% year over year, while Consumer client revenue increased 40%. PSG had exceptional growth in emerging markets with more than 100% growth in China, its third-largest market. Operating profit was $589 million, or 5.8% of revenue, up from $336 million, or 4.3% of revenue, in the prior-year period.

Imaging and Printing Group

Imaging and Printing Group (IPG) revenue grew 4% year over year to $7.6 billion. On a year-over-year basis, supplies revenue grew 6%, Commercial hardware revenue grew 5% and Consumer hardware revenue declined 5%. Printer unit shipments increased 5% year over year, with Consumer printer hardware units up 3% and Commercial printer hardware units up 15%. Momentum in key growth initiatives continued, with printer-based multi-function devices up 26%. Operating profit was $1.1 billion, or 14.5% of revenue, flat from the prior year period of $1.1 billion.

Enterprise Storage and Servers

Enterprise Storage and Servers (ESS) reported revenue of $5.2 billion, up 10% over the prior-year period. On a year-over-year basis, industry-standard server revenue increased 14%, with x86 blade revenue up 78%. Storage revenue grew 7%, with revenue growth of 6% in external disk storage, including 17% in the midrange EVA line. Business critical systems revenue increased 5%, with Integrity systems growth of 59% offset by declines in PA-RISC and Alpha. Operating profit was $693 million, or 13.5% of revenue, up from $502 million, or 10.7% of revenue, in the prior-year period.

HP Services

HP Services (HPS) revenue increased 7% year over year to $4.4 billion. Revenue in Technology Services, Consulting and Integration, and Outsourcing Services each grew 7% over the prior-year period. Operating profit was $526 million, or 12.0% of revenue, up from $505 million, or 12.4% of revenue, in the prior-year period.

HP Software

HP Software revenue doubled over the prior-year period to $698 million, led by strong growth from the businesses acquired in HP's purchase of Mercury Interactive. On a year-over-year basis, HP OpenView grew 24% excluding Mercury. Operating profit was $177 million, or 25.4% of revenue, up from $60 million, or 17.2% of revenue, in the prior-year period.

Financial Services

HP Financial Services (HPFS) reported revenue of $657 million, an increase of 21% year over year. Financing volume and net portfolio assets increased 23% and 15%, respectively, over the prior-year period. Operating margin was 7.3% of revenue, up from 6.4% in the comparable period last year.

Asset management

HP generated $3.6 billion in cash flow from operations for the quarter. Inventory ended the quarter at $8.0 billion, down 4 days over the prior year. Accounts receivable increased $2.5 billion over the prior-year period to $13.4 billion, up 3 days over the prior-year period. Accounts payable decreased $315 million over the prior-year period to $11.8 billion. HP's dividend payment of $0.08 per share in the fourth quarter resulted in cash usage of $206 million. HP utilized $2.0 billion of cash during the fourth quarter to repurchase approximately 42 million shares of common stock from the open market. HP exited the quarter with $11.6 billion in gross cash, which includes cash and cash equivalents of $11.3 billion, short-term investments of $152 million, and certain long-term investments of $129 million.

Full year fiscal 2007

Net revenue for the full fiscal year was $104.3 billion, representing growth of 14%, or 10% when adjusted for the effects of currency. GAAP operating profit was $8.7 billion and GAAP diluted EPS was $2.68, up from $2.18 in the prior-year period. Non-GAAP operating profit was $9.6 billion, with non-GAAP diluted EPS of $2.93 up from $2.38 in the prior-year period. Non-GAAP financial information excludes $690 million of adjustments on an after-tax basis, or $0.25 per diluted share, related primarily to the amortization of purchased intangible assets, in-process research and development charges, restructuring charges and pension curtailment gains. GAAP and non-GAAP financial information include all stock-based compensation expense in both current and prior-year periods.

Outlook

HP estimates Q1 FY08 revenue will be approximately $27.4 billion to $27.5 billion.

First quarter FY08 GAAP diluted EPS is expected to be $0.75, and non-GAAP diluted EPS is expected to be $0.80. Non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.05 per share, related primarily to the amortization of purchased intangible assets.

    HP estimates FY08 revenue will be approximately $111.5 billion.

FY08 GAAP diluted EPS is expected to be in the range of $3.12 to $3.17, and FY08 non-GAAP diluted EPS is expected to be in the range of $3.32 to $3.37. FY08 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.20 per share, related primarily to the amortization of purchased intangible assets.

Also today, HP announced that its board of directors has authorized an additional $8 billion for future repurchases of shares of HP common stock.

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 FY07 earnings conference call is accessible via an audio webcast at www.hp.com/investor/q42007webcast.

About HP

HP focuses on simplifying technology experiences for all of its customers - from individual consumers to the largest businesses. With a portfolio that spans printing, personal computing, software, services and IT infrastructure, HP is among the world's largest IT companies, with revenue totaling $104.3 billion for the fiscal year ended October 31, 2007. More information about HP is available at 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 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 plans; any statements concerning the expected development, performance or market share relating to products or services; 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 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 plans; the resolution of pending investigations, claims and disputes; and other risks that are described in HP's Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2007 and HP's other filings with the Securities and Exchange Commission, including HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2006. 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, 2007. In particular, determining HP's actual tax balances and provisions as of October 31, 2007 and for the fiscal year then ended 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.

Note to editors: More news from HP, including links to RSS feeds, is available at www.hp.com/hpinfo/newsroom/.

(C) 2007 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.

               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
            CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
                             (Unaudited)
                (In millions except per share amounts)



                                                 Three months ended
                                               -----------------------
                                               October  July   October
                                                 31,     31,     31,
                                                2007    2007    2006
                                               ------- ------- -------

Net revenue                                    $28,293 $25,377 $24,555

Costs and expenses(a):
     Cost of sales                              21,304  19,164  18,593
     Research and development                      914     917     870
     Selling, general and administrative         3,272   3,002   2,886
     Amortization of purchased intangible
      assets                                       187     183     153
     In-process research and development
      charges                                        4       -       -
     Restructuring                                (20)     (5)     152
     Pension curtailments and pension
      settlements, net                               -       -       -
                                               ------- ------- -------
          Total costs and expenses              25,661  23,261  22,654
                                               ------- ------- -------

Earnings from operations                         2,632   2,116   1,901

Interest and other, net                             81     165     190
(Losses) gains on investments                     (14)       5      14
                                               ------- ------- -------

Earnings before taxes                            2,699   2,286   2,105

Provision for taxes(b)                             535     508     408
                                               ------- ------- -------

Net earnings                                    $2,164  $1,778  $1,697
                                               ======= ======= =======

Net earnings per share:
     Basic                                       $0.84   $0.68   $0.62
     Diluted                                     $0.81   $0.66   $0.60


Cash dividends declared per share                   $-   $0.16      $-

Weighted-average shares used to compute net
 earnings per share:
     Basic                                       2,576   2,600   2,730
     Diluted                                     2,678   2,697   2,816

(a) Stock-based compensation expense included
 under SFAS 123(R) was as follows:
      Cost of sales                                $40     $34     $37
      Research and development                      18      19      20
      Selling, general and administrative          110      91      84
                                               ------- ------- -------
          Total costs and expenses                $168    $144    $141

(b) Tax benefit from stock-based compensation    $(54)   $(36)   $(40)
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
            CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
                (In millions except per share amounts)



                                                   Twelve months ended
                                                       October 31,
                                                   -------------------
                                                      2007      2006
                                                   ----------- -------
                                                   (Unaudited)

Net revenue                                           $104,286 $91,658

Costs and expenses(a):
     Cost of sales                                      78,887  69,427
     Research and development                            3,611   3,591
     Selling, general and administrative                12,226  11,266
     Amortization of purchased intangible assets           783     604
     In-process research and development charges           190      52
     Restructuring                                         387     158
     Pension curtailments and pension settlements,
      net                                                (517)       -
                                                   ----------- -------
          Total costs and expenses                      95,567  85,098
                                                   ----------- -------

Earnings from operations                                 8,719   6,560

Interest and other, net                                    444     606
Gains on investments                                        14      25
                                                   ----------- -------

Earnings before taxes                                    9,177   7,191

Provision for taxes(b)                                   1,913     993
                                                   ----------- -------

Net earnings                                            $7,264  $6,198
                                                   =========== =======

Net earnings per share:
     Basic                                               $2.76   $2.23
     Diluted                                             $2.68   $2.18


Cash dividends declared per share                        $0.32   $0.32

Weighted-average shares used to compute net
 earnings per share:
     Basic                                               2,630   2,782
     Diluted                                             2,716   2,852

(a) Stock-based compensation expense included
 under SFAS 123(R) was as follows:
      Cost of sales                                       $161    $144
      Research and development                              74      70
      Selling, general and administrative                  394     322
                                                   ----------- -------
          Total costs and expenses                        $629    $536

(b) Tax benefit from stock-based compensation           $(182)  $(160)
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
     ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
               OPERATING MARGIN AND EARNINGS PER SHARE
                             (Unaudited)
                (In millions except per share amounts)


                    Three            Three            Three
                     months           months           months
                     ended Diluted    ended Diluted    ended Diluted
                    October earnings  July   earnings October earnings
                     31,      per      31,     per      31,     per
                    2007     share    2007    share     2006   share
                    ---------------- ---------------- ----------------

GAAP net earnings    $2,164    $0.81  $1,778    $0.66  $1,697    $0.60

Non-GAAP
 adjustments:
  Amortization of
   purchased
  intangible assets     187     0.07     183     0.07     153     0.05
  In-process
   research and
  development
   charges                4        -       -        -       -        -
  Restructuring        (20)   (0.01)     (5)        -     152     0.05
  Pension
   curtailments and
  pension
   settlements, net       -        -       -        -       -        -
  Gains on
   investments(a)         -        -       -        -    (14)        -
  Adjustments for
   taxes               (39)   (0.01)    (44)   (0.02)    (83)   (0.02)
                    ---------------- ---------------- ----------------

Non-GAAP net
 earnings            $2,296    $0.86  $1,912    $0.71  $1,905    $0.68
                    ================ ================ ================


GAAP earnings from
 operations          $2,632           $2,116           $1,901

Non-GAAP
 adjustments:
  Amortization of
   purchased
  intangible assets     187              183              153
  In-process
   research and
  development
   charges                4                -                -
  Restructuring        (20)              (5)              152
  Pension
   curtailments and
  pension
   settlements, net       -                -                -
                    -------          -------          -------

Non-GAAP earnings
 from operations     $2,803           $2,294           $2,206
                    =======          =======          =======

GAAP operating
 margin                  9%               8%               8%
Non-GAAP
 adjustments             1%               1%               1%
                    -------          -------          -------

Non-GAAP operating
 margin                 10%               9%               9%
                    =======          =======          =======


(a) Beginning in fiscal 2007, HP no longer excludes gains or losses on
 investments when calculating financial measures presented on a non-
 GAAP basis.
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
     ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
               OPERATING MARGIN AND EARNINGS PER SHARE
                             (Unaudited)
                (In millions except per share amounts)

                                     Twelve           Twelve
                                      months           months
                                      ended Diluted    ended Diluted
                                     October earnings October earnings
                                       31,     per      31,     per
                                       2007   share     2006   share
                                     ---------------- ----------------

GAAP net earnings                     $7,264    $2.68  $6,198    $2.18

Non-GAAP adjustments:
     Amortization of purchased
      intangible assets                  783     0.29     604     0.21
     In-process research and
      development charges                190     0.07      52     0.02
     Restructuring                       387     0.14     158     0.06
     Pension curtailments and
      pension settlements, net         (517)   (0.19)       -        -
     Gains on investments(a)               -        -    (25)   (0.01)
     Adjustments for taxes             (153)   (0.06)   (210)   (0.08)
                                     ---------------- ----------------

Non-GAAP net earnings                 $7,954    $2.93  $6,777    $2.38
                                     ================ ================


GAAP earnings from operations         $8,719           $6,560

Non-GAAP adjustments:
     Amortization of purchased
      intangible assets                  783              604
     In-process research and
      development charges                190               52
     Restructuring                       387              158
     Pension curtailments and
      pension settlements, net         (517)                -
                                     -------          -------

Non-GAAP earnings from operations     $9,562           $7,374
                                     =======          =======

GAAP operating margin                     8%               7%
Non-GAAP adjustments                      1%               1%
                                     -------          -------

Non-GAAP operating margin                 9%               8%
                                     =======          =======


(a) Beginning in fiscal 2007, HP no longer excludes gains or losses on
 investments when calculating financial measures presented on a non-
 GAAP basis.
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
                CONSOLIDATED CONDENSED BALANCE SHEETS
                            (In millions)


                                               October 31, October 31,
                                                  2007        2006
                                               ----------- -----------
                                               (unaudited)

ASSETS

Current assets:
     Cash and cash equivalents                     $11,293     $16,400
     Short-term investments                            152          22
     Accounts receivable                            13,420      10,873
     Financing receivables                           2,507       2,440
     Inventory                                       8,033       7,750
     Other current assets                           11,997      10,779
                                               ----------- -----------

        Total current assets                        47,402      48,264
                                               ----------- -----------

Property, plant and equipment                        7,798       6,863

Long-term financing receivables and other
 assets                                              7,647       6,649

Goodwill and purchased intangible assets            25,852      20,205
                                               ----------- -----------

Total assets                                       $88,699     $81,981
                                               =========== ===========


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Notes payable and short-term borrowings        $3,186      $2,705
     Accounts payable                               11,787      12,102
     Employee compensation and benefits              3,465       3,148
     Taxes on earnings                               1,891       1,905
     Deferred revenue                                5,025       4,309
     Accrued restructuring                             123         547
     Other accrued liabilities                      13,783      11,134
                                               ----------- -----------

        Total current liabilities                   39,260      35,850
                                               ----------- -----------

Long-term debt                                       4,997       2,490
Other liabilities                                    5,916       5,497

Stockholders' equity                                38,526      38,144
                                               ----------- -----------

Total liabilities and stockholders' equity         $88,699     $81,981
                                               =========== ===========
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                             (Unaudited)
                            (In millions)


                                Three months ended Twelve months ended
                                 October 31, 2007   October 31, 2007
                                ------------------ -------------------

Cash flows from operating
 activities:
   Net earnings                             $2,164              $7,264
   Adjustments to reconcile net
    earnings to
   net cash provided by
    operating activities:
     Depreciation and
      amortization                             699               2,705
     Stock-based compensation
      expense                                  168                 629
     Provision for bad debt and
      inventory                                137                 409
     Losses (gains) on
      investments                               14                (14)
     In-process research and
      development charges                        4                 190
     Restructuring                            (20)                 387
     Pension curtailments and
      pension settlements, net                   -               (517)
     Deferred taxes on earnings                116                 415
     Excess tax benefit from
      stock-based compensation               (141)               (481)
     Other, net                                 38                (86)

     Changes in assets and
      liabilities:
       Accounts and financing
        receivables                        (1,843)             (2,808)
       Inventory                             (130)               (633)
       Accounts payable                        100               (346)
       Taxes on earnings                       321                 502
       Restructuring                          (67)               (606)
       Other assets and
        liabilities                          2,049               2,605
                                ------------------ -------------------
         Net cash provided by
          operating activities               3,609               9,615
                                ------------------ -------------------

Cash flows from investing
 activities:
     Investment in property,
      plant and equipment                    (813)             (3,040)
     Proceeds from sale of
      property, plant and
      equipment                                 65                 568
     Purchases of available-
      for-sale securities
     and other investments                   (247)               (283)
     Maturities and sales of
      available-for-sale
     securities and other
      investments                               22                 425
     Payments made in
      connection with business
     acquisitions, net                     (1,900)             (6,793)
                                ------------------ -------------------
        Net cash used in
         investing activities              (2,873)             (9,123)
                                ------------------ -------------------

Cash flows from financing
 activities:
     Issuance of commercial
      paper and notes payable,
      net                                    (461)               1,863
     Issuance of debt                            -               4,106
     Payment of debt                          (37)             (3,419)
     Issuance of common stock
      under employee stock plans               710               3,103
     Repurchase of common stock            (2,040)            (10,887)
     Excess tax benefit from
      stock-based compensation                 141                 481
     Dividends                               (206)               (846)
                                ------------------ -------------------
        Net cash used in
         financing activities              (1,893)             (5,599)
                                ------------------ -------------------

Decrease in cash and cash
 equivalents                               (1,157)             (5,107)
Cash and cash equivalents at
 beginning of period                        12,450              16,400
                                ------------------ -------------------
Cash and cash equivalents at
 end of period                             $11,293             $11,293
                                ================== ===================
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
                         SEGMENT INFORMATION
                             (Unaudited)
                            (In millions)

                                                 Three months ended
                                               -----------------------
                                               October  July   October
                                                 31,     31,     31,
                                                2007    2007   2006(a)
                                               ------- ------- -------

Net revenue:

    Enterprise Storage and Servers              $5,150  $4,547  $4,670
    HP Services                                  4,367   4,186   4,080
    HP Software                                    698     554     349
                                               ------- ------- -------
  Technology Solutions Group                    10,215   9,287   9,099
                                               ------- ------- -------
  Personal Systems Group                        10,133   8,894   7,823
  Imaging and Printing Group                     7,554   6,751   7,283
  HP Financial Services                            657     582     545
  Corporate Investments                            210     220     160
                                               ------- ------- -------
    Total Segments                              28,769  25,734  24,910
  Eliminations of intersegment
  net revenue and other                          (476)   (357)   (355)
                                               ------- ------- -------

    Total HP Consolidated                      $28,293 $25,377 $24,555
                                               ======= ======= =======

Earnings from operations:

    Enterprise Storage and Servers                $693    $464    $502
    HP Services                                    526     430     505
    HP Software                                    177      81      60
                                               ------- ------- -------
  Technology Solutions Group                     1,396     975   1,067
                                               ------- ------- -------
  Personal Systems Group                           589     519     336
  Imaging and Printing Group                     1,094     981   1,080
  HP Financial Services                             48      39      35
  Corporate Investments                            (5)     (5)    (36)
                                               ------- ------- -------
     Total Segments                              3,122   2,509   2,482

     Corporate and unallocated costs and
     eliminations                                (197)   (101)   (156)
     Unallocated costs related to stock-based
     compensation expense                        (122)   (114)   (120)
     Amortization of purchased intangible
      assets                                     (187)   (183)   (153)
     In-process research and development
      charges                                      (4)       -       -
     Restructuring                                  20       5   (152)
     Pension curtailments and pension
      settlements, net                               -       -       -
     Interest and other, net                        81     165     190
     (Losses) gains on investments                (14)       5      14
                                               ------- ------- -------

    Total HP Consolidated Earnings Before
     Taxes                                      $2,699  $2,286  $2,105
                                               ======= ======= =======


(a) Certain fiscal 2007 organizational realignments have been
 reflected retroactively to provide improved visibility and
 comparability. For each of the quarters in fiscal year 2006, the
 realignments primarily resulted in revenue movement within business
 units within the ESS and HPS segments. There was no impact to total
 segment revenue.
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
                         SEGMENT INFORMATION
                             (Unaudited)
                            (In millions)

                                                       Twelve months
                                                            ended
                                                        October 31,
                                                      ----------------
                                                        2007   2006(a)
                                                      -------- -------

Net revenue:

    Enterprise Storage and Servers                     $18,769 $17,308
    HP Services                                         16,646  15,617
    HP Software                                          2,325   1,301
                                                      -------- -------
  Technology Solutions Group                            37,740  34,226
                                                      -------- -------
  Personal Systems Group                                36,409  29,166
  Imaging and Printing Group                            28,465  26,786
  HP Financial Services                                  2,336   2,078
  Corporate Investments                                    762     566
                                                      -------- -------
    Total Segments                                     105,712  92,822
  Eliminations of intersegment
  net revenue and other                                (1,426) (1,164)
                                                      -------- -------

    Total HP Consolidated                             $104,286 $91,658
                                                      ======== =======

Earnings from operations:

    Enterprise Storage and Servers                      $1,980  $1,446
    HP Services                                          1,829   1,507
    HP Software                                            347      85
                                                      -------- -------
  Technology Solutions Group                             4,156   3,038
                                                      -------- -------
  Personal Systems Group                                 1,939   1,152
  Imaging and Printing Group                             4,315   3,978
  HP Financial Services                                    155     147
  Corporate Investments                                   (57)   (151)
                                                      -------- -------
     Total Segments                                     10,508   8,164

     Corporate and unallocated costs and
     eliminations                                        (439)   (331)
     Unallocated costs related to stock-based
     compensation expense                                (507)   (459)
     Amortization of purchased intangible assets         (783)   (604)
     In-process research and development charges         (190)    (52)
     Restructuring                                       (387)   (158)
     Pension curtailments and pension settlements,
      net                                                  517       -
     Interest and other, net                               444     606
     (Losses) gains on investments                          14      25
                                                      -------- -------

    Total HP Consolidated Earnings Before Taxes         $9,177  $7,191
                                                      ======== =======


(a) Certain fiscal 2007 organizational realignments have been
 reflected retroactively to provide improved visibility and
 comparability. For fiscal year 2006, the realignments primarily
 resulted in revenue movement within business units within the ESS and
 HPS segments. There was no impact to total segment revenue.
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
                 SEGMENT / BUSINESS UNIT INFORMATION
                             (Unaudited)
                            (In millions)

                                                 Three months ended
                                               -----------------------
                                               October  July   October
                                                 31,     31,     31,
                                                2007    2007   2006(a)
                                               ------- ------- -------

Net revenue:

     Industry Standard Servers                  $3,059  $2,814  $2,694
     Business Critical Systems                   1,043     811     997
     Storage                                     1,048     922     979
                                               ------- ------- -------
    Enterprise Storage and Servers               5,150   4,547   4,670
                                               ------- ------- -------
     Technology Services                         2,266   2,164   2,117
     Outsourcing Services(b)                     1,267   1,234   1,185
     Consulting and Integration                    834     788     778
                                               ------- ------- -------
    HP Services                                  4,367   4,186   4,080
                                               ------- ------- -------
     OpenView                                      616     481     251
     OpenCall and Other                             82      73      98
                                               ------- ------- -------
    HP Software                                    698     554     349
                                               ------- ------- -------
  Technology Solutions Group                    10,215   9,287   9,099
                                               ------- ------- -------
     Desktops                                    4,210   3,924   3,675
     Notebooks                                   5,161   4,253   3,463
     Workstations                                  473     441     362
     Handhelds                                      97     105     139
     Other                                         192     171     184
                                               ------- ------- -------
  Personal Systems Group                        10,133   8,894   7,823
                                               ------- ------- -------
     Commercial Hardware                         1,968   1,738   1,873
     Consumer Hardware                           1,237     982   1,296
     Supplies                                    4,335   4,017   4,100
     Other                                          14      14      14
                                               ------- ------- -------
  Imaging and Printing Group                     7,554   6,751   7,283
                                               ------- ------- -------
  HP Financial Services                            657     582     545
  Corporate Investments                            210     220     160
                                               ------- ------- -------
     Total Segments                             28,769  25,734  24,910
                                               ------- ------- -------

  Eliminations of intersegment
  net revenue and other                          (476)   (357)   (355)
                                               ------- ------- -------

    Total HP Consolidated                      $28,293 $25,377 $24,555
                                               ======= ======= =======


(a) Certain fiscal 2007 organizational realignments have been
 reflected retroactively to provide improved visibility and
 comparability. For each of the quarters in fiscal year 2006, the
 realignments primarily resulted in revenue movement within business
 units within the ESS and HPS segments. There was no impact to total
 segment revenue.

(b) Reflects name change from Managed Services to Outsourcing Services
 effective in fiscal 2007.
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
                 SEGMENT / BUSINESS UNIT INFORMATION
                             (Unaudited)
                            (In millions)

                                                       Twelve months
                                                            ended
                                                        October 31,
                                                      ----------------
                                                        2007   2006(a)
                                                      -------- -------

Net revenue:

     Industry Standard Servers                         $11,380  $9,982
     Business Critical Systems                           3,564   3,656
     Storage                                             3,825   3,670
                                                      -------- -------
    Enterprise Storage and Servers                      18,769  17,308
                                                      -------- -------
     Technology Services                                 8,678   8,348
     Outsourcing Services(b)                             4,821   4,382
     Consulting and Integration                          3,147   2,887
                                                      -------- -------
    HP Services                                         16,646  15,617
                                                      -------- -------
     OpenView                                            1,988     899
     OpenCall and Other                                    337     402
                                                      -------- -------
    HP Software                                          2,325   1,301
                                                      -------- -------
  Technology Solutions Group                            37,740  34,226
                                                      -------- -------
     Desktops                                           15,850  14,613
     Notebooks                                          17,642  12,000
     Workstations                                        1,721   1,368
     Handhelds                                             490     620
     Other                                                 706     565
                                                      -------- -------
  Personal Systems Group                                36,409  29,166
                                                      -------- -------
     Commercial Hardware                                 7,181   6,899
     Consumer Hardware                                   4,442   4,427
     Supplies                                           16,788  15,402
     Other                                                  54      58
                                                      -------- -------
  Imaging and Printing Group                            28,465  26,786
                                                      -------- -------
  HP Financial Services                                  2,336   2,078
  Corporate Investments                                    762     566
                                                      -------- -------
     Total Segments                                    105,712  92,822
                                                      -------- -------

  Eliminations of intersegment
  net revenue and other                                (1,426) (1,164)
                                                      -------- -------

    Total HP Consolidated                             $104,286 $91,658
                                                      ======== =======


(a) Certain fiscal 2007 organizational realignments have been
 reflected retroactively to provide improved visibility and
 comparability. For fiscal year 2006, the realignments primarily
 resulted in revenue movement within business units within the ESS and
 HPS segments. There was no impact to total segment revenue.

(b) Reflects name change from Managed Services to Outsourcing Services
effective in fiscal 2007.
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
                CALCULATION OF NET EARNINGS PER SHARE
                             (Unaudited)
                (In millions except per share amounts)


                                                  Three months ended
                                                ----------------------
                                                October July   October
                                                  31,     31,    31,
                                                 2007    2007   2006
                                                ------- ------ -------

Numerator:
  Net earnings                                   $2,164 $1,778  $1,697
  Adjustment for interest expense on zero-
   coupon
  subordinated convertible notes, net of taxes        2      1       2
                                                ------- ------ -------

  Net earnings, adjusted                         $2,166 $1,779  $1,699
                                                ======= ====== =======

Denominator:
  Weighted-average shares used to compute
    basic EPS                                     2,576  2,600   2,730
  Effect of dilutive securities:
    Dilution from employee stock plans               94     89      78
    Zero-coupon subordinated convertible notes        8      8       8
                                                ------- ------ -------
  Dilutive potential common shares                  102     97      86
                                                ------- ------ -------

  Weighted-average shares used to compute
  diluted EPS                                     2,678  2,697   2,816
                                                ======= ====== =======

Net earnings per share:
  Basic(a)                                        $0.84  $0.68   $0.62
  Diluted(b)                                      $0.81  $0.66   $0.60



(a) HP's basic earnings per share was calculated based on net earnings
 and the weighted-average number of shares outstanding during the
 reporting period.

(b) The diluted earnings per share included additional dilution from
 potential issuance of common stock, such as stock issuable pursuant
 to exercise of stock options and conversion of debt, except when such
 issuances would be antidilutive.
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
                CALCULATION OF NET EARNINGS PER SHARE
                (In millions except per share amounts)


                                                      Twelve months
                                                           ended
                                                       October 31,
                                                    ------------------
                                                       2007      2006
                                                    ----------- ------
                                                    (Unaudited)

Numerator:
  Net earnings                                           $7,264 $6,198
  Adjustment for interest expense on zero coupon
  subordinated convertible notes, net of taxes                7      7
                                                    ----------- ------

  Net earnings, adjusted                                 $7,271 $6,205
                                                    =========== ======

Denominator:
  Weighted-average shares used to compute
    basic EPS                                             2,630  2,782
  Effect of dilutive securities:
    Dilution from employee stock plans                       78     62
    Zero-coupon subordinated convertible notes                8      8
                                                    ----------- ------
  Dilutive potential common shares                           86     70
                                                    ----------- ------

  Weighted-average shares used to compute
  diluted EPS                                             2,716  2,852
                                                    =========== ======

Net earnings per share:
  Basic(a)                                                $2.76  $2.23
  Diluted(b)                                              $2.68  $2.18

(a) HP's basic earnings per share was calculated based on net earnings
 and the weighted-average number of shares outstanding during the
 reporting period.

(b) The diluted earnings per share included additional dilution from
 potential issuance of common stock, such as stock issuable pursuant
 to exercise of stock options and conversion of debt, except when such
 issuances would be antidilutive.
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
            CALCULATION OF NON-GAAP NET EARNINGS PER SHARE
                             (Unaudited)
                (In millions except per share amounts)




                                                  Three months ended
                                                ----------------------
                                                October July   October
                                                  31,     31,    31,
                                                 2007    2007   2006
                                                ------- ------ -------

Numerator:
  Non-GAAP net earnings                          $2,296 $1,912  $1,905
  Adjustment for interest expense on zero-
  coupon subordinated convertible notes,
  net of taxes                                        2      1       2
                                                ------- ------ -------

  Non-GAAP net earnings, adjusted                $2,298 $1,913  $1,907
                                                ======= ====== =======

Denominator:
  Weighted-average shares used to compute
  basic EPS                                       2,576  2,600   2,730
  Effect of dilutive securities:
    Dilution from employee stock plans               94     89      78
    Zero-coupon subordinated convertible notes        8      8       8
                                                ------- ------ -------
  Dilutive potential common shares                  102     97      86
                                                ------- ------ -------

  Weighted-average shares used to compute
  diluted EPS                                     2,678  2,697   2,816
                                                ======= ====== =======

Non-GAAP net earnings per share:
  Basic(a)                                        $0.89  $0.74   $0.70
  Diluted(b)                                      $0.86  $0.71   $0.68




(a) HP's basic non-GAAP earnings per share was calculated based on
 non-GAAP net earnings and the weighted-average number of shares
 outstanding during the reporting period.

(b) HP's diluted non-GAAP earnings per share included additional
 dilution from potential issuance of common stock, such as stock
 issuable pursuant to exercise of stock options and conversion of
 debt, except when such issuances would be antidilutive.
               HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
            CALCULATION OF NON-GAAP NET EARNINGS PER SHARE
                             (Unaudited)
                (In millions except per share amounts)


                                                         Twelve months
                                                             ended
                                                          October 31,
                                                         -------------
                                                           2007   2006
                                                         ------ ------

Numerator:
  Non-GAAP net earnings                                  $7,954 $6,777
  Adjustment for interest expense on zero
  coupon subordinated convertible notes,
  net of taxes                                                7      7
                                                         ------ ------

  Non-GAAP net earnings, adjusted                        $7,961 $6,784
                                                         ====== ======

Denominator:
  Weighted-average shares used to compute
  basic EPS                                               2,630  2,782
  Effect of dilutive securities:
    Dilution from employee stock plans                       78     62
    Zero-coupon subordinated convertible notes                8      8
                                                         ------ ------
  Dilutive potential common shares                           86     70
                                                         ------ ------

  Weighted-average shares used to compute
  diluted EPS                                             2,716  2,852
                                                         ====== ======

Non-GAAP net earnings per share:
  Basic(a)                                                $3.02  $2.44
  Diluted(b)                                              $2.93  $2.38




(a) HP's basic non-GAAP earnings per share was calculated based on
 non-GAAP net earnings and the weighted-average number of shares
 outstanding during the reporting period.

(b) HP's diluted non-GAAP EPS included additional dilution from
 potential issuance of common stock, such as stock issuable pursuant
 to exercise of stock options and conversion of debt, except when such
 issuances would be antidilutive.

Use of Non-GAAP Financial Measures

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. These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. The GAAP measure most directly comparable to non-GAAP operating profit is earnings from operations. The GAAP measure most directly comparable to non-GAAP operating margin is operating margin. The GAAP measure most directly comparable to non-GAAP net earnings is net earnings. The GAAP measure most directly comparable to non-GAAP diluted earnings per share is diluted net earnings per share. The GAAP measure most directly comparable to gross cash is cash and cash equivalents. Reconciliations of each of these non-GAAP financial measures to GAAP information are included in the tables above.

Use and Economic Substance of Non-GAAP Financial Measures Used by HP

Non-GAAP operating profit and non-GAAP operating margin are defined to exclude the effects of any restructuring charges, charges relating to the amortization of purchased intangible assets, pension curtailment and settlement gains and losses, and in-process research and development charges recorded during the relevant period. Non-GAAP net earnings and non-GAAP diluted earnings per share consist of net earnings or diluted net earnings per share excluding those same charges as well as any gains or losses on investments recorded for periods ending on or before October 31, 2006. In addition, non-GAAP net earnings and non-GAAP diluted earnings per share are adjusted by the amount of additional taxes or tax benefit associated with each non-GAAP item. HP's management uses these non-GAAP financial measures for purposes of evaluating HP's historical and prospective financial performance, as well as HP's performance relative to its competitors. HP's management also uses these non-GAAP measures to further its own understanding of HP's segment operating performance. HP believes that excluding those items mentioned above from these non-GAAP financial measures allows HP management to better understand HP's consolidated financial performance in relationship to the operating results of HP's segments, as management does not believe that the excluded items are reflective of ongoing operating results. More specifically, HP's management excludes each of those items mentioned above for the following reasons:

    --  Restructuring charges consist of costs primarily related to
        severance and benefits for employees terminated pursuant to a
        formal restructuring plan, including strategic reallocations
        or workforce reductions and early retirement programs. HP
        excludes these restructuring costs (and any reversals of
        charges recorded in prior periods) for purposes of calculating
        these non-GAAP measures because it believes that these
        historical costs do not reflect expected future operating
        expenses and do not contribute to a meaningful evaluation of
        HP's current operating performance or comparisons to HP's past
        operating performance.

    --  Purchased intangible assets consist primarily of customer
        contracts, customer lists, distribution agreements, technology
        patents, and products, trademarks and trade names purchased in
        connection with acquisitions. HP incurs charges relating to
        the amortization of these intangibles, and those charges are
        included in HP's GAAP presentation of earnings from
        operations, operating margin, net earnings and net earnings
        per share. Amortization charges for HP's purchased intangible
        assets are inconsistent in amount and frequency and are
        significantly impacted by the timing and magnitude of HP's
        acquisitions. Consequently, HP excludes these charges for
        purposes of calculating these non-GAAP measures to facilitate
        a more meaningful evaluation of HP's current operating
        performance and comparisons to HP's past operating
        performance.

    --  In the first quarter of fiscal 2007, HP recognized a net
        curtailment gain for its non-U.S. pension plans. The net gain
        primarily reflects a plan design change in Mexico where HP
        ceased pension accruals for current employees who did not meet
        defined criteria based on age and years of service (calculated
        as of December 31, 2006). In the second quarter of fiscal
        2007, HP recorded a pension curtailment gain primarily
        resulting from the decision to cease pension accruals under
        its U.S. defined benefit pension plan for all employees who
        were still accruing benefits under that plan. The curtailment
        gain was partially offset primarily by a settlement expense
        associated with the distribution and subsequent transfer of
        accrued pension benefits from HP's U.S. Excess Benefit Plan to
        HP's U.S. Executive Deferred Compensation Plan for the
        terminated vested plan participants. Because pension
        curtailment gains and pension settlement losses are
        inconsistent in amount and frequency, HP believes that
        eliminating these gains and losses for purposes of calculating
        these non-GAAP measures facilitates a more meaningful
        evaluation of HP's current operating performance and
        comparisons to HP's past operating performance.

    --  In-process research and development charges relate to amounts
        assigned to tangible and intangible assets to be used in
        research and development projects that have no alternative
        future use and therefore are charged to expense at the
        acquisition date. Charges for in-process research and
        development in connection with HP's acquisitions are reflected
        in HP's GAAP presentation of earnings from operations,
        operating margin, net earnings and net earnings per share.
        In-process research and development expenses are not
        indicative of HP's ongoing operating costs and are generally
        unpredictable. Accordingly, HP believes that eliminating these
        expenses for purposes of calculating these non-GAAP measures
        contributes to a meaningful evaluation of HP's current
        operating performance and comparisons to HP's past operating
        performance.

    --  HP's investments consist principally of time deposits, other
        debt securities and equity securities of publicly traded and
        privately held companies. HP sells investments or adjusts the
        value of investments from time to time based on market
        conditions and, in the case of investments in equity
        securities, the strategic value of such investments. HP's
        activities in this regard are included in its GAAP
        presentation of net income and net earnings per share. Because
        the amount and timing of these gains or losses and adjustments
        are unpredictable, HP eliminated these gains or losses and
        adjustments for purposes of calculating non-GAAP net earnings
        and non-GAAP diluted earnings per share for periods ending on
        or before October 31, 2006. Beginning in fiscal 2007, HP no
        longer excludes gains or losses on investments when
        calculating non-GAAP net earnings and non-GAAP diluted
        earnings per share, as the amounts of those gains and losses
        have been immaterial in recent periods.

Gross cash is a non-GAAP measure that is defined as cash and cash equivalents plus short-term investments and certain long-term investments that may be liquidated within 90 days pursuant to the terms of existing put options or similar rights. HP's management uses gross cash for the purpose of determining the amount of cash available for investment in HP's businesses, funding strategic acquisitions, repurchasing stock and other purposes. HP's management also uses gross cash for the purposes of evaluating HP's historical and prospective liquidity, as well as to further its own understanding of HP's segment operating results. Because gross cash includes liquid assets that are not included in GAAP cash and cash equivalents, HP believes that gross cash provides a more accurate and complete assessment of HP's liquidity and segment operating results.

Material Limitations Associated with Use of Non-GAAP Financial Measures

These non-GAAP financial measures may have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of HP's results as reported under GAAP. Some of the limitations in relying on these non-GAAP financial measures are:

    --  Items such as amortization of purchased intangible assets,
        though not directly affecting HP's cash position, represent
        the loss in value of intangible assets over time. The expense
        associated with this loss in value is not included in non-GAAP
        operating profit, non-GAAP operating margin, non-GAAP net
        earnings and non-GAAP diluted earnings per share and therefore
        does not reflect the full economic effect of the loss in value
        of those intangible assets.

    --  Items such as restructuring charges that are excluded from
        non-GAAP operating profit, non-GAAP operating margin, non-GAAP
        net earnings and non-GAAP diluted earnings per share can have
        a material impact on cash flows and earnings per share.

    --  HP may not be able to liquidate immediately the long-term
        investments included in gross cash, which may limit the
        usefulness of gross cash as a liquidity measure.

    --  Other companies may calculate non-GAAP operating profit,
        non-GAAP operating margin, non-GAAP net earnings, non-GAAP
        diluted earnings per share and gross cash differently than HP
        does, limiting the usefulness of those measures for
        comparative purposes.

Compensation for Limitations Associated with Use of Non-GAAP Financial Measures

HP compensates for the limitations on our use of non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash by relying primarily on its GAAP results and using non-GAAP financial measures only supplementally. HP also provides robust and detailed reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure within this press release and in other written materials that include these non-GAAP financial measures, and HP encourages investors to review carefully those reconciliations.

Usefulness of Non-GAAP Financial Measures to Investors

HP believes that providing non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash 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 "through the eyes" of management. HP further believes that providing this information better enables HP's investors to understand HP's operating performance and to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. Disclosure of these non-GAAP financial measures also facilitates comparisons of HP's operating performance with the performance of other companies in HP's industry that supplement their GAAP results with non-GAAP financial measures that are calculated in a similar manner.

CONTACT: HP
Robert Sherbin, +1-650-857-2381
robert.sherbin@hp.com
Emma McCulloch, +1-650-857-4183
emcculloch@hp.com
or
HP Media Hotline, +1-866-266-7272
pr@hp.com
www.hp.com/go/newsroom

SOURCE: HP