Once, Hewlett Packard Enterprise Company (HPE) and HP Inc. were part of the same company, the pioneer Hewlett-Packard. But since November 2015, they have been two separate publicly traded companies.
That’s the date when HP Inc. retained the printing and PC business divisions, while HPE retained the technology solutions divisions.
HP’s split into two separate companies fueled a great buzz in social media: layoffs, a lot of layoffs, and a lot of talk about efficiency, flexibility, and profit margins.
Now, there’s evidence that the split and the layoffs that have followed have improved margins for both companies—see tables. But they still have to improve revenues, and overall profits, as the innovation trait of the old HP has yet to return.
HPE’s and HP’s Key Metrics 12/24/2016
| Company | Profit Margin | Revenue (ttm) | Qtrly Earnings Growth (yoy) |
| HP Inc. | 5.17% | $48.24B | -- |
| HPE | 6.31% | $50.12 | -78.20% |
Source: Yahoo.finance.com
HPE’s and HP’s Key Metrics 3/4/2016
| Company | Profit Margin | Revenue (ttm) | Qtrly Earnings Growth (yoy) |
| HP | 3.72% | $101.74B | -0.50% |
| HPE | 4.72% | $52.11 | 168.40% |
Source: Yahoo.finance.com
Old HPQ’s Key Financial Metrics 9/16/2015
| Profit Margin | Qtrly Earnings Growth (yoy) |
| 4.30% | -13.30% |
Source: Finance.Yahoo.com
Still, HP’s split into two separate companies and the massive lay offs has been a big victory -- for stockholders, that is. So far, HP is up 56.61 percent and HP Inc. (HPQ) 26.98 percent.
| Company | YTD* |
| HPE | 56.61 |
| HPQ | 26.98 |
*It doesn’t include dividends
Source: Finance.yahoo.com 12/23/2016
Apparently, Wall Street is focusing on profit margins rather than on the innovation trait of the two companies, at least for the time being.
That’s especially the case for HPE’s shares, which outperform those of HP Inc.’s by a big margin. For a good reason: HPE has retained the growing business segments of the old HPQ, while HP Inc. has retained the declining business segments, as discussed in a previous piece here.
