HP 2009 Annual Report Download - page 58

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Net revenue in Corporate Investments and Other declined in fiscal 2009 from fiscal 2008, resulting
from lower sales of network infrastructure products primarily as a result of the slowdown in the
networking market.
HPFS net revenue decreased in fiscal 2009 from fiscal 2008 due to unfavorable currency
movements.
The net revenue increase in Services in fiscal 2009 from fiscal 2008 was due primarily to net
revenue increases in infrastructure technology outsourcing, application services and business process
outsourcing primarily as a result of the EDS acquisition in the fourth quarter of fiscal 2008, the effect
of which was partially offset by unfavorable currency impacts and a decline in spending from existing
customers. Net revenue in technology services declined in fiscal 2009 due primarily to unfavorable
currency impacts and weak economic conditions, the effect of which was partially offset by growth in
extended warranty.
Fiscal 2008
In fiscal 2008, HP net revenue increased approximately 13.5% from the prior-year period (8.4% on
a constant currency basis). The favorable currency impact for fiscal 2008 was due primarily to the
movement of the dollar against the euro. U.S. net revenue was $36.9 billion for fiscal 2008, an increase
of 6% from the prior year, while international net revenue increased 17% to $81.4 billion.
PSG net revenue increased in fiscal 2008 from fiscal 2007 as a result of a unit volume increase of
22%. The unit volume increase was the result of strong growth in notebooks with continued strength in
emerging markets. The positive revenue impact from this unit volume increase was moderated by
declines in ASPs in commercial and consumer clients of 7% and 4%, respectively.
IPG net revenue increased in fiscal 2008 from fiscal 2007 due to the growth in supplies net
revenue as a result of higher unit volumes with strong performance from color-related products. For
fiscal 2008, commercial hardware net revenues increased slightly, while consumer hardware net
revenues declined due primarily to competitive pricing pressures and a slowing economy.
ESS net revenue increased in fiscal 2008 over the prior-year period due primarily to strong
performance in storage, which was due in part to growth within our EVA and MSA product lines, and
revenue growth in industry standard servers from increased unit volumes and blade revenues. Fiscal
2008 revenues in business critical systems were flat compared to the prior-year period.
HP Software net revenue growth in fiscal 2008 from fiscal 2007 was attributable to strong growth
in our BTO business unit resulting from revenue increases in support, growth in license revenue,
partially as a result of our acquisition of Opsware Inc. (‘‘Opsware’’) in September 2007, and, to a lesser
extent, increased services contract sales.
HPFS net revenue increased in fiscal 2008 from the prior year due primarily to an increase in the
mix of operating leases as a portion of our asset portfolio and growth in average portfolio assets.
Services net revenue increased in fiscal 2008 over the prior year due primarily to net revenue
increases in technology services, infrastructure technology outsourcing, application services and business
process outsourcing primarily as a result of the EDS acquisition on August 26, 2008.
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