HP 2008 Annual Report Download - page 56

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
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 average selling prices (‘‘ASPs’’) in commercial and consumer clients of 7% and 4%,
respectively.
HPS net revenue increased in fiscal 2008 over the prior year due primarily to the acquisition of
EDS on August 26, 2008. HPS net revenue, excluding EDS, also increased in fiscal 2008 from fiscal
2007 as a result of revenue growth in technology services primarily from IT solution support services,
existing account growth in outsourcing services and base business growth in our consulting and
integration business unit.
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 and 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 business technology optimization (‘‘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.
In fiscal 2007, HP net revenue increased approximately 14% from the prior-year period (10% on a
constant currency basis). The favorable currency impact for fiscal 2007 was due primarily to the
movement of the dollar against the euro. U.S. net revenue was $34.8 billion for fiscal 2007, an increase
of 8% from the prior year, while international net revenue increased 17% to $69.5 billion.
PSG had double-digit net revenue growth in fiscal 2007 across all regions as a result of overall unit
volume increases of 28%. The unit volume increases resulted from strong growth in notebooks with
significant improvements in emerging markets. The impact of these increases was partially offset by
declines in ASPs in commercial and consumer clients of 5% and 1%, respectively.
HPS net revenue during fiscal 2007 increased due primarily to favorable currency impacts, revenue
increases in outsourcing services driven by existing accounts growth and new business, and revenue
increases in consulting and integration associated with acquisitions made in fiscal 2007.
IPG net revenue growth in fiscal 2007 was due mainly to increased unit volumes of printer supplies
resulting from the continued expansion of printer hardware placements and the strong performance of
supplies for color-related products.
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