HP reported its fiscal first quarter 2012 earnings last night, and the results weren’t pretty.
Overall revenue of $30 billion was down 7% from the previous year and overall profit declined 44% compared with the previous year. Hewlett Packard’s (HP) Enterprise Servers, Storage and Networking (ESSN) revenues declined 10%.
“Industry standard servers revenue was down in a highly competitive environment that was compounded by the hard disk shortage,” said HP CEO Meg Whitman on the company’s earnings conference call. “Business critical system revenues also declined as we continued to address the Oracle Itanium situation.”
Adding insult to injury, IBM issued a note to press claiming it has taken substantial server business away from HP and Oracle / Sun Microsystems. IBM said it recorded nearly 2,400 competitive displacements in 2011 for its servers and storage systems. Almost 40% of the displacements came from HP and more than 25% came from Oracle/Sun, according to an IBM press release issued Wednesday.
The flooding “forced us to sell lower or less configured, lower-end systems and prevented us from accessing higher-margin, more highly configured systems,” CFO Brian T. Gladden told analysts on the earnings call.
Still, Dell reported that its server and networking revenues grew 6% year-over-year.