Let's actually look at the numbers

Revenue off 8%, year over year.  Down from $29.7B to $27.2B  Forecast was $27.3B

By group, PCs down 11%, with 3% operating margins (these will not improve).  This was mixed, in that Commercial sales were off 3%, and Consumer down 22%.

Printers were down 4%, still with 15.6% operating margins (still healthy, but somewhat at risk).  This was also mixed, with hardware sales up 12% for Commercial and up 2% for Consumer.  Ink sales were down 4% -- now here's the rub.  Do the math -- ink is 85% of the total revenue for this group.  Highly leveraged these days on supplies and supply replacement.  So, even though hardware sales 'look good' it is almost unimportant.  And unfortunately imaging is so good on computers these days, and with high-def TVs and monitors, and high-freq networks, it augurs poorly for lots more color print copies.

Enterprise was the big surprise, with a revenue decline of 9%, and a mere 3.3% operating profit.  This is now an amalgam of Hardware (e.g. Servers, Moonshot, etc) and Services (think the marriage of the old EDS and Ann Livermore's consulting group).  Each was down roughly 10%, and this is a shocker in the sense that this is where Meg has been putting the most "upside" emphasis, along with the Board

What's gone wrong here?  One answer is that the EDS team and the HP team for services have NEVER jelled.  The animosities and infighting are worse than the historic HP Ink vs Laser printing battles from the accounts I receive, and putting all of this under Donatelli only exacerbated the issue rather than led to palliatives.

Another answer is that Dell is newly aggressive in the server space, and that has cost HP.  A bigger potential issue is Cisco, enraged when HP went into Networking.  Cisco in networks has rebuffed HP successfully, almost as thoroughly as HP did to Dell in printing some years ago.  But strangely, Cisco has been successful reportedly in skimming some cream from the large enterprise server business, especially at HP rather than IBM expense.  Who would thought that possible?

So, whether Donatelli is a sacrificial lamb, or had real complicity in the Enterprise story is hard to say, but it is entirely safe to say that this is the troubled area hitherto absent from the discussion.  The signs have been clear for two quarters, maybe three, on the equipment side.  The services side just has not worked, period, for HP for a long time in terms of momentum or initiative.  IBM continues, in my opinion, to work this smartly, using intellectual consulting as the lead -- helping companies understand how to innovate, working on smart grids, consulting with governments, etc. on better practices for environmental and cultural issues as well as straight-forward business issues.  HP could have, but hasn't risen to this challenge.

Ah, so....

I agree with Meg's discouraging close -- 2014 will not be the recovery year, which two quarters ago was pretty optimistic.  But.... hope springs eternal.  let's hope a rabbit appears soon in the hat...