26 Aug

Hewlett-Packard’s Printing Segment Still Isn’t Inking Out Gains

WRITTEN BY Adam Rogers FEATURED IN Post-Release Earnings Reports

Revenues fall by 14% YoY

Hewlett-Packard’s (HPQ) Printing business group reported revenue of $4.4 billion in fiscal 3Q16, which fell by 14% YoY (year-over-year). It fell by 10% YoY on a constant currency basis. The operating profit of this segment was $903 million of 20.4% of total revenues.

Hewlett-Packard’s Printing Segment Still Isn’t Inking Out Gains

Supplies constituted 64% of revenues in the Printing segment, whereas Commercial Hardware and Consumer Hardware accounted for 29% and 7% of revenue, respectively.

Revenue from HPQ’s Supplies sub-segment fell by 18% YoY—13% YoY on a constant currency basis—in fiscal 3Q16. Total Hardware units fell by 10% YoY, Commercial Hardware units fell by 2%, and Consumer Hardware units fell by 14% YoY in fiscal 3Q16. Hewlett-Packard expects the trajectory of the revenue from its Supplies sub-segment to stabilize by 2017.

The CEO of Hewlett-Packard (HPQ), Dion Weisler, stated, “The market remained very challenging and our progress was a direct result of discipline and operational rigor. We did what we said by both reducing discounts, as evidenced by year-over-year improvements in constant currency ASPs and improving our cost structure to enable the more positive NPV unit growth sequentially.”

Hewlett-Packard dominates the hardcopy peripherals market

According to the International Data Corporation, Hewlett-Packard continues to be a market leader in the worldwide hardcopy peripherals market, with a share of ~36% at the end of 1Q16. Its share, however, fell from 40% in 1Q15.

Canon (CAJ) is in a distant second place in this market, with a share of ~19.5%. Seiko Epson (SEKEY), Brother (BRTHY), and Korea’s (EWY) Samsung (SSNLF) are other small players in this market with shares of 17.3%, 7.7%, and 4.4%, respectively.

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