Yesterday, HP Inc. reported results for its first quarter of 2017 (see here), and held a conference call for investors that included an update on the company’s printer group. HP Inc. President and CEO Dion Weisler noted that although the HP printer group’s net revenue was down 3 percent year-over-year in the first quarter, printer hardware revenue grew year-over-year in constant currency, with units up 6 percent, bolstered by HP’s new Sprocket mobile photo printer that Weisler says is helping HP “create a new category in mobile printing.”
The HP chief also said “the overall market was a bit better than expected, with slight unit growth year-over-year, and gains in with copier/MFPs for the 19th consecutive quarter.”
Strong MPS Revenue Results
HP also saw “strong results in Managed Print Services (MPS) and continued good momentum in Instant Ink enrollment.” In the graphic-arts printer market, Weisler says HP “delivered strong performance once again, with year-over-year revenue growth in constant currency for the 14th consecutive quarter.” HP also saw “strong hardware growth in Indigo, large-format industrial, and PageWide XL, as well as growth in graphics-supplies and services.”
Although printer-supplies revenue was down 3 percent year-over-year, Weisler says HP “remain(s) confident that supplies revenue in constant currency will stabilize by the end of fiscal 2017,” noting that “it’s all about supplies, and we continued to drive a number of initiatives within the Four Box Model to return this revenue stream to growth.”
Weisler said HP is also on track with its acquisition of Samsung’s printing business that he says will help accelerate HP’s A3 copier/MFP portfolio. HP expects the acquisition to be complete in the second half of 2017, subject to regulatory approval and other closing conditions.
“Milestone Quarter for 3D Printing”
Weisler said the first quarter of 2017 was a milestone quarter for HP, as it began shipping its first 3D printers (designed for professional and industrial use). HP Customers such as Jabil, Materialise, and Shapeways have installed HP Multi Jet Fusion 3D printers, and Weisler says HP is on track to “disrupt the $12 trillion traditional manufacturing market.”
Printer-Hardware Units Up
HP CFO Catherine A. Lesjak noted that in the first quarter, HP’s printer-hardware units were up 6 percent year-over-year, “a demonstration of the continued improvement in our cost structure.” In the fourth quarter of 2016, HP gained 3.2 points of market share in the laser-printer market and 0.2 points of share in the inkjet-printer market, both year-over-year.
As with Weisler, Lesjak also remarked on HP’s Sprocket mobile printer – “the world’s smallest printer” – noting that it elicited “incredible interest,” and that it contributed to 1.6 points of unit growth year-over-year.
However, overall, printer hardware average selling prices were down to mid-single digits year over-year, primarily, according to Lesjak, due to a less-extensive product mix.
Lesjak, though, says that with HP’s improved cost structure, it can be more competitive in A4 laser pricing, and more low-end units can be sold with a net positive value (NPV) HP will continue to seek to place NPV unit placements, as “this is one of the many levers to drive ongoing supplies growth.”
HP’s Managed Print Services revenue grew faster than the market “once again.” Lesjak also said that HP’s graphic-arts printer group reported “balanced revenue growth across all regions, with strong performance in Indigo and growth in supplies year-over-year.”
As with Weisler, Lesjak said HP “remain(s) on track to stabilize supplies revenue in constant currency by the end of the year.” HP’s printer-supplies revenue mix was 67 percent, up slightly year over year, driven by HP’s graphic-arts printer segment.
- February 2017: Revenues up for HP’s First Quarter, PC Revenue up 10 Percent
- November 2016: Small Revenue Gain for HP’s Fourth Quarter
- October 2016: HP Inc. to Cut 3,000 to 4,000 Jobs in the Next Three Years; Provides Fiscal Year Outlook
- September 2016: Samsung Board Approves Sale of Printer Business to HP; Will Continue to Source Printers from HP
- September 2016: HP Set to Purchase Samsung’s Printer Group for $1.05 Billion As it Prepares for Assault on Copier Market
- August 2016: Revenue Down Slightly for HP Inc.’s Third Quarter, but Net Earnings up 20 Percent
- May 2016: Slow Second Quarter for HP Inc., but Remains ‘Committed to PCs and Printing’
- February 2016: Rocky Results for HP Inc.’s First Quarter; Job Cuts ‘Accelerated’
- November 2015: Tough Fourth Quarter for HP as Split is Completed