When Will Hewlett-Packard’s Supplies Revenues Stabilize?



Printing segment revenues fell 17% YoY

Hewlett-Packard’s (HPQ) revenues from its Printing segment fell 17% YoY (year-over-year) to $4.6 billion and 11% YoY in fiscal 1Q16. Operating profit from this segment was $787 million, or 17% of revenues. Supplies constituted 67% of revenues in the Printing segment, whereas commercial hardware and consumer hardware accounted for 26% and 7% of revenues, respectively.

Supplies revenues fell 14% YoY and 8% YoY on a constant currency basis in fiscal 1Q16. Total hardware units fell 20% YoY with commercial hardware units falling 15% and consumer hardware units falling 23% YoY in fiscal 1Q16.

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Hewlett-Packard expects the trajectory of revenues from the Supplies subsegment to stabilize by 2017. The average selling price rose quarter-over-quarter on a constant currency basis. The company also observed constant currency growth in Graphics for the tenth consecutive quarter and gained market share in Design and Large Format Industrial Printers.

Hewlett-Packard dominates hardcopy peripherals market

As you can see in the above chart, Hewlett-Packard continues to be a market leader in the worldwide hardcore peripherals market with a share of approximately 40%.

Canon (CAJ) is at a distant second place in this market, with a share of about 19%. Seiko Epson (SEKEY), Brother (BRTHY), and Korea’s (EWY) Samsung (SSNLF) are other smaller players in this market.

In the next part, we’ll see why Hewlett-Packard’s Personal Systems revenues decreased in fiscal 1Q16.


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