HP Inc. (NYSE:HPQ) Q2 2015 Earnings Conference Call - Final Transcript

May 21, 2015 • 05:00 pm ET


HP Inc. (NYSE:HPQ) Q2 2015 Earnings Conference Call - Final Transcript


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Good afternoon. Welcome to the second quarter 2015 Hewlett-Packard earnings conference call. (Operator Instructions) As reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Mr. Jim Bergkamp, VP of Investor Relations. Please proceed.

Jim Bergkamp

Good afternoon. Welcome to our FY15 second quarter earnings conference call with Meg Whitman, HP's Chairman, President and Chief Executive Officer, and Cathie Lesjak, HP's Executive Vice President and Chief Financial Officer. Before handing the call over to Meg, let me remind you that this call is being webcast. A replay of the webcast will be made available shortly after the call for approximately one year.

(Forward-Looking Cautionary Statements) I'll now turn the call over to Meg.

Meg Whitman

Thanks, Jim, and thanks to all of you for joining us today. With the first half of FY15 now behind us, I am pleased to report that once again, we delivered the results we said we would. We executed well in a tough market environment, and in Q2 we delivered non-GAAP diluted EPS of $0.87, at the high end of our previously provided outlook range. Cash flow from operations was $1.5 billion, free cash flow was approximately $800 million, and we returned approximately $1 billion to shareholders in the form of share repurchases and dividends.

In the quarter, we executed well across industry standard servers, converged storage, personal systems and graphics, and enterprise services improved profitability. We continued to invest in innovation across the Company, and improve our go-to-market approach. At the same time, we face significant market challenges due to currency movements, softness in PCs, home printing and IT outsourcing markets, and execution challenges in pockets of the business that require more work. But overall, I am pleased with our progress and the turnaround.

Turning to the separation, as you will recall, last October we announced our plan to separate HP into two independent Fortune 50 companies. Today I am more convinced than ever that this is the right thing to do. Over the past six months, we've seen the markets continue to shift and evolve at a rapid pace.

In Hewlett-Packard Enterprise, our customers are demanding services and solutions that will help them manage traditional IT better, while planning their journey to a hybrid infrastructure, and we need to move faster and smarter to meet that demand. At HP Inc., we will continue engineering multi-elast devices and immersive computing experiences for business and consumer, and ink and laser-based solutions that provide a faster, a more affordable exciting way to print, manage and deliver content, all while continue to invest in strategic areas like 3D printing. The separation will enable us to do that.

Since October, we've made substantial progress across a number of areas that gives me confidence that we'll complete the separation by the end of our fiscal year. We've completed the leadership and organizational structures for each Company, and largely completed our workforce assignments. We made progress in recruiting new Board members