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HP Inc – the no-drama one – is actually doing fine with PCs, printers

Personal gear a more reliable moneymaker than servers. Who knew?

On a day when Meg Whitman, CEO of its sibling HPE, announced her departure from the biz, HP Inc revealed its slow and steady progress in two tough markets.

The printers and PCs half of the Hewlett-Packard split closed out a $52bn fiscal year that saw revenues climb by eight per cent on the previous 12 months.

For the fourth and final quarter of its financial year – the three months to October 31 – HP Inc reported:

  • Revenues of $13.9bn were up 11 per cent from Q4 2016 and beat analyst estimates of $13.4bn.
  • Net income was $660m, up 29 per cent from $492m on the year-ago quarter.
  • Earnings per share of $0.44 were in line with analyst expectations.
  • Personal systems (PCs) unit revenue was $9.1bn, up 13 per cent from $8bn last year. Notebooks made up $5.4bn of that, with desktops logging $2.8bn and workstations returning $526m.
  • Printing group revenues were $4.9bn, up 7 per cent from this time last year, with the supplies business in particular jumping 10 per cent.

"Our results demonstrate that HP is strong and getting stronger,” CEO Dion Weisler told investors on a conference call on Tuesday. "We posted top-line growth across both Personal Systems and Print, with broad-based, double-digit growth in all three regions, while also growing operating profit and non-GAAP EPS year-over-year."

For the full 2017 fiscal year:

  • Revenue of $52.1bn was up 8 per cent from $48.2bn in 2016.
  • Net income was $2.53bn on the year, up just slightly from $2.5bn in 2016, when HP recorded a $160m write-down for discontinued operations. When adjusted for continuing operations – i.e. businesses that are still going – net income for 2017 was down five per cent year-on-year, or $2.52bn compared to $2.66bn last year, in part because this year HP Inc had to take big hits from restructuring ($362m) and acquisition charges ($125m).
  • Personal systems group revenue was $33.3bn, up 11 per cent from $30bn last year.
  • Printing group revenue was $18.8bn, up slightly from 18.26bn in 2016.

In short, talk of the death of printing and personal computers this year has been greatly exaggerated, it appears. Weisler pointed out as much to analysts when asked about the outlook for HP's personal systems group

"This is still a $333bn market," the HP Inc boss said of the PC space. "One in five machines have an HP logo on it, meaning four of five don't, and that is an opportunity for us."

HP Inc also expects to be able to bolster the returns in its printing business as it looks to take on Samsung's print business, thanks to their 2016 acquisition deal. ®


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