HP expects fiscal 2008 to be another solid financial year as the company continues to fine-tune its cost structure in an attempt to become more operationally efficient.
HP executive vice-president and CFO, Bob Wayman, one day after announcing he will retire on January 1, outlined the company's expectations for fiscal year 2008, projecting revenue between $US100.9 billion and $US102.8 billion. The figures represent year-over-year growth of 4 per cent to 6 per cent and are in line with what analysts expected. The projections are also similar to the company's performance in fiscal 2006, when revenue of $US91.7 billion represented 6 per cent growth over previous-year revenue of $US86.7 billion.
HP already has set guidance for fiscal 2007, which began on November 1, at $US97 billion in revenue, or GAAP (generally accepted accounting principles) earnings per share of $US2.28 to $US2.33. Wayman set 2008 financial projections as part of a meeting with securities analysts in New York early this week, where he and other HP executives laid out the company's goals for the next couple of years.
Breaking it down by business segment, HP also expects growth in its Personal Systems Group, Imaging and Printing Group, Enterprise Storage and Servers and HP Services divisions to be between 4 per cent to 6 per cent in 2008. However, growth should be higher in both its Software and HP Financial Services segments, the company said. HP expects its software business, recently buoyed by its acquisition of Mercury Interactive, to have 10 per cent to 15 per cent growth in fiscal 2007, while its financial services business will grow 6 per cent to 8 per cent.
HP CEO, Mark Hurd, said the company was a work in progress as it strove to achieve goals he laid out when he joined the company in late March 2005. To streamline the business, HP began a massive restructuring last year that resulted in 10 per cent of its workforce being cut. Hurd implied there would be more slicing and dicing throughout HP to create a leaner business.
As a result, operating margins should gradually improve over the next couple of years. In 2006 operating margins were 8 per cent; in fiscal 2008 the company was projecting that would climb to between 9 per cent to 9.5 per cent, it said. "We're committed to taking care of our business and our cost issues," Hurd told analysts.