Common-Size Income Statement
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- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2015
- Operating Profit Margin since 2015
- Price to Operating Profit (P/OP) since 2015
- Analysis of Revenues
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Hewlett Packard Enterprise Co., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2024-04-30), 10-Q (reporting date: 2024-01-31), 10-K (reporting date: 2023-10-31), 10-Q (reporting date: 2023-07-31), 10-Q (reporting date: 2023-04-30), 10-Q (reporting date: 2023-01-31), 10-K (reporting date: 2022-10-31), 10-Q (reporting date: 2022-07-31), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-31), 10-K (reporting date: 2021-10-31), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-04-30), 10-Q (reporting date: 2021-01-31), 10-K (reporting date: 2020-10-31), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-04-30), 10-Q (reporting date: 2020-01-31), 10-K (reporting date: 2019-10-31), 10-Q (reporting date: 2019-07-31), 10-Q (reporting date: 2019-04-30), 10-Q (reporting date: 2019-01-31), 10-K (reporting date: 2018-10-31), 10-Q (reporting date: 2018-07-31), 10-Q (reporting date: 2018-04-30), 10-Q (reporting date: 2018-01-31).
- Revenue Composition Trends
- The proportion of net revenue derived from products generally ranged between approximately 58% and 66% over the measured periods. There was a slight decline in product revenue share during early 2020, coinciding with a rise in services share. Service revenue as a percentage of net revenue fluctuated between roughly 32% and 42%, peaking in early 2020 before decreasing again. Financing income represented a small but gradually increasing portion of net revenue, rising from about 1.4% to over 2% by 2024.
- Cost Structure and Gross Profit
- The cost of products consistently accounted for between about 37% and 47% of net revenue, with some improvement noted in mid-2023 where costs dropped to near 38%. Cost of services showed less volatility but generally hovered around 19% to 27%, with a notable increase during early 2020. Overall, total cost of revenue remained in the range of 63% to 69%, maintaining a relatively stable gross margin around 30% to 36%. Despite some fluctuations, gross profit percentages remained fairly resilient throughout the periods.
- Operating Expenses and Charges
- Research and development expenditures consistently ranged from approximately 5% to 8.6% of net revenue, exhibiting a gradual upward trend in recent years. Selling, general and administrative expenses ranged between about 15.6% and 18.7%, showing some increase towards the middle of the period, followed by minor declines. Amortization of intangible assets mostly stayed around 0.9% to 1.6%, with a spike observed in early 2020. Restructuring and transformation costs varied considerably, with transformation costs being more prominent, particularly between 2019 and 2021.
- Special Charges and Recoveries
- Impairment of goodwill was recorded during two specific intervals, early 2019 and early 2023, significantly impacting profitability in those quarters. Acquisition, disposition, and related charges experienced occasional spikes, notably in mid-2019. Disaster charges and recoveries were minor and sporadic, generally having a minimal net effect.
- Profitability Metrics
- Earnings from operations showed fluctuations, with several negative periods notably in early 2020 and again late 2022 to early 2023, but generally recovered to positive margins between 3% and 8%. Earnings before taxes varied widely, including a significant spike in early 2022 driven by a one-time non-recurring item. Net earnings from continuing operations closely tracked operating earnings, showing negative impact during crisis periods but recovering subsequently. The net earnings attributable to the company followed a similar pattern, highlighting resilience and recovery after downturns.
- Tax and Interest
- Provision for taxes demonstrated volatility, with some quarters showing tax benefits and others provision charges, reflecting fluctuating earnings and one-off items. Interest and other net expenses generally remained below 1.5% of net revenue but increased notably around early 2020. Non-service net periodic benefit credits contributed modest positive effects intermittently during recent years.
- Additional Observations
- Litigation judgment was significant in one quarter in 2021, representing nearly 32% of net revenue for that period, considerably distorting profitability metrics in that instance. Earnings from equity interests showed mild positive impact consistently, contributing fractions of percentage points to total earnings. Separation costs were negligible overall.
- Summary
- The company’s financial performance over the analyzed quarters demonstrates steady revenue composition with a balanced portfolio of products and services. While cost management mostly kept margins stable, isolated impairments, restructuring, and litigation charges caused episodic disruptions. Operating and net earnings exhibited resilience with recovery following downturns, supported by moderate tax adjustments and controlled interest expenses. Overall, the financial trends indicate a company navigating cyclical challenges with relatively stable profitability and ongoing investments in development and administrative functions.