HP 2015 Annual Report Download - page 61

Table of Contents
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•Software net revenue decreased due to lower net revenue from licenses, support and professional services;
•HPFS net revenue decreased due primarily to lower portfolio revenue from lower average portfolio assets and lower asset management activity,
primarily in customer buyouts;
•Corporate Investments net revenue increased due to the sale of IP; and
•Personal Systems net revenue increased due to growth in commercial PCs, particularly notebooks, along with growth in consumer notebooks.
A more detailed discussion of segment revenue is included under "Segment Information" below.
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HP's gross margin increased by 0.1 percentage points for fiscal year 2015 compared with fiscal 2014. From a segment perspective, the primary factors
impacting gross margin performance are summarized as follows:
•ES gross margin increased due primarily to service delivery efficiencies and improving profit performance in underperforming contracts;
•HPFS gross margin decreased due primarily to unfavorable currency impacts, lower margin in customer buyouts, and lower portfolio margin
due to competitive pricing;
•EG gross margin decreased due primarily to a higher revenue mix of ISS products, unfavorable currency impacts, and competitive pricing;
•Printing gross margin decreased due primarily to a competitive pricing environment in hardware and unfavorable currency impacts;
•Personal Systems gross margin decreased due primarily to unfavorable currency impacts and a lower mix of commercial products, partially
offset by favorable component costs and operational cost improvements; and
•Software gross margin decreased due to a lower mix of license revenue.
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HP's gross margin increased by 0.8 percentage points for fiscal year 2014 compared with fiscal 2013. From a segment perspective, the primary factors
impacting gross margin performance are summarized as follows:
•ES gross margin increased due primarily to our continued focus on service delivery efficiencies, improving profit performance in under-
performing contracts and labor savings as a result of restructuring;
•Printing gross margin increased due primarily to favorable currency impacts from the Japanese yen, continued cost structure improvements and
a favorable mix from a higher proportion of graphics and ink supplies;
•Corporate Investments gross margin increased due to the sale of IP;
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Source: HP INC, 10-K, December 16, 2015 Powered by Morningstar® Document Research℠
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