HP 2011 Annual Report Download - page 57

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Net Revenue
The components of the weighted net revenue change were as follows for the following fiscal years
ended October 31:
2011 2010(1)
Percentage Points
Enterprise Servers, Storage and Networking ............................... 1.5 3.7
HP Financial Services ............................................... 0.4 0.3
HP Software ..................................................... 0.4 0.1
Services ......................................................... 0.3 0.1
Imaging and Printing Group .......................................... — 1.5
Corporate Investments/Other ......................................... (0.7) (0.5)
Personal Systems Group ............................................. (0.9) 4.8
Total HP ........................................................ 1.0 10.0
(1) Reflects certain reclassifications made to historical results to conform to the current year
presentation as noted in Note 19 to the Consolidated Financial Statements in Item 8.
Fiscal 2011
In fiscal 2011, total HP net revenue increased 1.0% (decreased 0.9% on a constant currency basis).
U.S. net revenue decreased 1.0% to $44.1 billion, while net revenue from outside of the United States
increased 2.0% to $83.1 billion. As reflected in the table above, the ESSN segment was the largest
contributor to HP net revenue growth as a result of balanced growth across all regions. ESSN segment
net revenue growth was helped by the strong performance in products related to our 3PAR Inc.
(‘‘3PAR’’) and 3Com Corporation (‘‘3Com’’) acquisitions. An analysis of the change in net revenue for
each business segment is included under ‘‘Segment Information’’ below.
Fiscal 2010
In fiscal 2010, total HP net revenue increased 10.0% (8.3% on a constant currency basis). U.S. net
revenue increased 7.8% to $44.5 billion, while net revenue from outside of the United States increased
11.3% to $81.5 billion. For fiscal 2010, the PSG segment was the largest contributor to HP net revenue
growth as a result of balanced growth across the regions. An analysis of the change in net revenue for
each business segment is included under ‘‘Segment Information’’ below.
Gross Margin
Fiscal 2011
In fiscal 2011, total HP gross margin decreased by 0.5 percentage points. The decline was driven
by a lower gross margin in the Services, IPG and Corporate Investments segments, the effect of which
was partially offset by a favorable commodity pricing environment in the PSG and ESSN segments, and
a favorable mix from higher HP Software and HP Networking revenue.
PSG gross margin increased in fiscal 2011 primarily as a result of a favorable commodity pricing
environment, combined with lower warranty costs.
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