HP: Print revenue in line with low expectations

HP Inc has said a 7.4% constant currency revenue drop in its Printing division was in line with its expectations.

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HP Inc has said a 7.4% constant currency revenue drop in its Printing division was in line with its expectations.

For HP’s Q2 2024 ended 30 April, Printing’s sales were $4.37 billion. This was a year-on-year decline of 7.8% as reported, or a 7.4% decrease on a constant currency basis.

Both hardware and supplies were down.

Hardware revenue dropped 18% year-over-year as units fell by 17%. HP pointed to continued weak demand, especially in China and EMEA, as well as share loss in both the home and office channels due to “aggressive pricing” – a factor partially driven by further depreciation of the yen versus the US dollar.

By customer segment, commercial revenue decreased by 12% to $1.2 billion while consumer fell 16% to $299 million. In both, units were down 17%.

Supplies revenue was $2.9 billion, a year-on-year drop of around 4%. HP is expecting low-to-mid single-digit declines to persist for the rest of its financial year.

Bright spots included increased volumes and share gains in big tank devices, further growth in subscription numbers and revenue (including from the new all-in plans), and sales growth in the industrial graphics market. CEO Enrique Lores said usage per office printer has been “fairly stable”, an indicator that the print market will stabilise in the back half of the year.

Printing’s adjusted operating profit for the quarter was $829 million, $70 million lower than last year’s Q2. However, adjusted operating margin was flat at 19%, which is at the higher end of HP’s guidance. Cost reductions from the ‘Future Ready’ strategic plan helped keep margins steady. Lores said changes to the company’s cost structure are making HP more competitive and would help drive share gains in the second half of the year.

The main talking point from the results was the Personal Systems (PS) division, which reported year-on-year growth for the first time in eight quarters. Much is being made of HP’s new AI-enabled devices, which are expected to represent 10% of shipments in H2. There were also positive signs from the commercial PC market, where HP’s unit numbers were up by 12% in Q2.

Palo Alto (CA), USA