HP Inc will be less Lesjak, Jack: CFO retires as PC'n'printer biz shifts more gear

And trims its headcount, too

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HP Inc execs claimed on Tuesday they are staying ahead of the rest of the market with solid sales in both printers and PCs.

The hardware giant revealed its financial figures for another healthy quarter, Q2 FY2018, although warned a small number of layoffs are coming amid its ongoing rejig of its workforce while confirming its chief beancounter will eject from the business by the start of 2019.

Here's a summary of HP Inc's numbers for the three months to April 30:

  • Revenues of $14bn were up 13 per cent from $12.4bn in the second quarter of 2017, or up 10 per cent with constant currency.
  • Net income of $1.1bn was an 89 per cent jump from $600m a year ago.
  • Earnings per share (non-GAAP) were $0.48, right in line with analyst estimates.
  • Personal Systems Group revenue was $8.76bn, up 14 per cent from $7.54bn in the year-ago quarter. Commercial revenue was up 16 per cent, while consumer was up 10 per cent. Both notebook and desktop revenues were up seven per cent.
  • Printing revenue was $5.24bn, up 11 per cent from $4.73bn in the year-ago quarter.
  • Slipped into the good news was the revelation that HP would be stepping up its ongoing corporate restructuring efforts – which will include the axe falling on a further one to two per cent of the workforce – and reserving at least $150m in costs as a result. Thus, by 2019, the firm will have laid off 4,500 to 5,000 people as opposed to a planned 4,000. This comes as HP Inc continues to integrate the printing business it acquired from Samsung.
  • Execs told analysts they do expect hardware component costs to go up as the DRAM market remains a tough scene, and the rising cost of oil makes raw materials like plastics and resins more expensive.

Not surprisingly, CEO Dion Weisler was quick to tout the company's ability to grow at a faster clip than the rest of the PC and printing market, saying he was "quite pleased" with HP Inc's second quarter.

"We delivered another quarter of double digit year over year revenue and profit growth, strong EPS and impressive free cash flow and performed well across segments and regions,” Weisler said.

"Our sharp focus on innovation, combined with operational excellence and driving profitable growth is paying off."

HP Inc also used the solid fiscal quarter to announce a change atop its ranks as chief financial officer Cathie Lesjak said she would be stepping down effective July 1. Head of treasury Steve Fieler will take over her role, while Lesjak will be made interim COO for the remainder of the calendar year, exiting the corporation proper in early 2019 therefore.

The move is hardly a shock for HP Inc. Lesjack has been with the company for 32 years, and had announced her intention to step down at the start of next year.

"Cathie deserves tremendous credit for helping drive our performance, growth and reinvention. Our strategy is working, the team is focused, and we're firing on all cylinders," Weisler said of his outgoing CFO.

"She is a best-in-class leader with incredible commitment to delivering shareholder value and has done an extraordinary job assembling a world-class team."

HP shares were down $0.02 in after-hours trading at $21.28. ®


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