Income Statement
The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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HP Inc., consolidated income statement
US$ in millions
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
- Revenue and Cost Trends
- Over the period, net revenue displayed a downward trend initially, dropping from approximately $112.3 billion in 2013 to around $103.4 billion in 2015. A substantial decline followed in 2016 with revenue nearly halving to $48.2 billion. Subsequent years showed a modest recovery, with net revenue increasing to $58.5 billion by 2018. Corresponding to this, the cost of revenue decreased from about $86.4 billion in 2013 to $78.6 billion in 2015, then sharply reduced in 2016 to $39.2 billion, before gradually rising to $47.8 billion in 2018.
- Profitability
- Gross profit mirrored the revenue pattern, declining from $25.9 billion in 2013 to $24.8 billion in 2015, followed by a notable drop to $9.0 billion in 2016. Thereafter, gross profit showed steady improvement, reaching $10.7 billion in 2018. Earnings from operations decreased from $7.1 billion in 2013 to $5.5 billion in 2015 and further declined to approximately $3.5 billion in 2017, before slightly rebounding to $4.1 billion by 2018. Earnings from continuing operations before taxes followed a similar trajectory, trending downward throughout the period, falling from $6.5 billion in 2013 to $3.0 billion in 2018.
- Expenses
- Research and development (R&D) expenses remained relatively stable in absolute terms during the early years, averaging around $3.1-$3.5 billion from 2013 to 2015, but declined sharply in 2016 and 2017 to just under $1.2 billion, before a slight uptick in 2018. Selling, general, and administrative expenses followed a marked decrease from $13.3 billion in 2014 to about $3.8 billion in 2016, subsequently increasing modestly to $4.9 billion in 2018. Restructuring and other charges showed variability, increasing significantly in 2014, then decreasing after 2016.
- One-Time and Non-Recurring Charges
- Several non-recurring charges were noted, including separation costs reported only in 2015 amounting to approximately $1.3 billion, and impairment of data center assets also only noted in 2015. Defined benefit plan settlement charges appeared intermittently and were relatively minor in comparison. Acquisition-related charges remained low across years but displayed slight fluctuations.
- Interest, Taxes, and Other Financial Items
- Interest expense on borrowings slightly decreased from $426 million in 2013 to a low of $273 million in 2016, then increased slightly through 2018. A loss on extinguishment of debt was recorded only in 2018. Tax indemnifications had a one-time positive effect in 2016 but turned negative by 2018. The tax provision varied considerably, with a notable benefit recorded in 2018, which significantly enhanced net earnings despite a lower earnings before taxes figure. Other net and interest items fluctuated without a clear trend.
- Net Earnings
- Net earnings from continuing operations decreased from $5.1 billion in 2013 to $2.5 billion by 2017, reflecting the general downward trends in revenues and operating income, coupled with expense reductions. However, a substantial increase occurred in 2018, nearly doubling net earnings to $5.3 billion, driven in part by tax benefits and improvements in operational efficiency. Net loss from discontinued operations was minimal and only recorded in 2016.