Printing Market Remains Merciless to HP

While being a PC maker isn't quite as rough right now as it was earlier this year, being a printer maker is still a miserable business. HP Inc.'s (HPQ) fiscal third-quarter results and guidance drive this home.

Improved Personal Systems (PC) division sales allowed HP to report third-quarter revenue of $11.89 billion (down 4% annually) and adjusted EPS of 48 cents, above mean analyst estimates of $11.47 billion and 44 cents. But with big printing declines weighing, HP also guided for fourth-quarter adjusted EPS of 34 cents to 37 cents, below a 41-cent mean estimate. Shares were recently down 5.5% in after-hours trading.

Personal Systems revenue was roughly flat annually at $7.5 billion, after having declined 10% in the second quarter to $7 billion. An 8% increase in consumer sales helped offset a 3% drop in commercial sales. And with the help of job cuts, the division saw its operating income rise 58% to $333 million.

By contrast, HP's Printing division revenue fell 14% to $4.4 billion, a decline nearly matching the second quarter's 16% drop. Commercial hardware revenue fell 3% to $1.3 billion, consumer hardware revenue fell 22% to $293 million and high-margin supplies revenue fell 18% to $2.8 billion. Job cuts let operating income rise 1% to $903 million.

The performance of HP's PC unit largely meshes with what research firms IDC and Gartner reported last month. The firms respectively estimated 4.5% and 5.2% declines for global PC shipments in the calendar second quarter -- a notable improvement over the 11.5% and 9.6% declines estimated for the first quarter -- while adding top-4 players Lenovo, HP, Dell (DELL) and Asus all continued gaining share relative to smaller rivals with less scale and R&D resources.

If you liked this article you might like

Hewlett Packard Enterprise's Meg Whitman Joins Dropbox

Carly Fiorina Will Not Run for Senate in 2018

Carly Fiorina on Not Running for Senate, Cryptocurrency and the Opioid Epidemic

Hewlett Packard Enterprise Jumps After-Hours on Q3 Earnings Beat

HPE's Meg Whitman Will Have to Answer Some Tough Questions on Tuesday