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Hewlett-Packard Had an Outstanding Performance in 3Q17

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Part 3
Hewlett-Packard Had an Outstanding Performance in 3Q17 PART 3 OF 7

What Impacted Hewlett-Packard’s Printing Business?

Printing revenue rose 6% YoY in fiscal 3Q17

Hewlett-Packard’s (HPQ) Printing Business segment’s revenue rose in fiscal 3Q17 to $4.7 billion—a rise of 6% YoY (year-over-year). Its revenue rose 7% YoY on a constant currency basis. For the quarter ending in July 2017, the operating profit was $813 million or 17.3% of the total revenue. Supplies accounted for 66% of Hewlett-Packard’s printing revenue. Commercial hardware and consumer hardware accounted for 21% and 13%, respectively, of Hewlett-Packard’s printing revenue.

The revenue from Hewlett-Packard’s supplies vertical rose 10% YoY in fiscal 3Q17, while total hardware units rose 1% YoY. Last year, Hewlett-Packard stated that it expected the printing revenue to rise YoY in fiscal 2017. It estimated that the supplies revenue would stabilize by the end of 2017.

What Impacted Hewlett-Packard’s Printing Business?

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Printing Business segment’s metrics

As you can see in the above chart, the revenue in Hewlett-Packard’s supplies vertical has stabilized in fiscal 3Q17. The printing business experienced YoY revenue growth in both the hardware and supplies verticals. Continued revenue growth in strategic areas such as MPS (managed print services), graphics, and Instant Ink had a positive impact on sales in fiscal 3Q17.

During the company’s fiscal 3Q17 earnings call, CEO Dion Weisler said, “Quarter three was the first full quarter of shipping our portfolio of disruptive A3 multifunction printers and we are encouraged by the early progress.” Weisler stated that A3 printers are the most secure printers in the world. Hewlett-Packard is driven by customers’ positive reception for the product. The company is adding new channel partners at a faster rate than previously anticipated.

Growth in Hewlett-Packard’s A3 portfolio is also expected to drive the demand for MPS in the next few quarters.

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