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.