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Weakness in PC Market Haunts HP’s Performance in 3Q15

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Printing and Personal Systems Group continued to fall in 3Q15

In fiscal 3Q15, as we saw previously in this series, Hewlett-Packard (HPQ) generated approximately half of its revenue from the Printing and Personal Systems Group. In 3Q15, the Printing and Personal Systems Group’s revenue fell year-over-year 12% to $12.6 billion.

In calendar 2Q15, Gartner reported that global PC shipments fell by 9.50% to 68.4 million units on a YoY (year-over-year) basis in 2Q15. It’s the steepest PC shipment fall recorded since 3Q13. Debilitating demand and high inventory levels led to worse-than-expected PC sales in 2Q15. As a result, continued weakness in the PC market continued to haunt this segment’s growth.

Micron Technology (MU) also blamed a weakness in the PC sector for its recent poor fiscal 3Q15 results.

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PC shipments record one of steepest falls

As the above chart shows, Lenovo (LNVGY) continued to hold its leadership position in worldwide PC shipments in 2Q15. HP and Dell held the second and third top vendor positions in 2Q15.

However, Lenovo suffered a YoY shipment fall for the first time since 3Q13. In 2Q15, Hewlett-Packard also faced a shipment fall after five consecutive quarters of PC shipment growth. The difficult business climate in the EMEA (Europe, the Middle East, and Africa), Latin America, and Japan (EWJ) impacted the growth. The EMEA region is very important for the technology industry growth, as this region generates significant revenue for technology companies.

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