Why Did Hewlett-Packard’s Personal Systems Revenue Fall?


Jun. 1 2016, Updated 7:06 p.m. ET

Personal Systems revenue fell 10% YoY

Hewlett-Packard’s (HPQ) revenue for its Personal Systems segment fell 10% YoY (year-over-year) to $7 billion and 5% on a constant currency basis in fiscal 2Q16. Operating profit from this segment was $242 million, or 3.5% of revenue.

Notebooks accounted for 55% of revenue in the Personal Systems segment. The Desktops, Workstations, and Other subsegments accounted for 34%, 7%, and 4% of the segment’s revenue, respectively.

Total units fell by 9% YoY in fiscal 2Q16. The Notebook segment’s revenue fell by 8% YoY while its units fell by 6% YoY in fiscal 2Q16. The Desktop segment’s revenue fell by 13% YoY while its units fell by 10% YoY.

HPQ’s commercial revenue fell by 7% YoY, and its consumer revenue fell by 16% YoY in fiscal 2Q16.

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PC market share rose marginally

According to market research company International Data Corporation, total PC (personal computer) units fell by 11.5% from 68.5 million units in 1Q15 to 60.6 million units in 1Q16.

China’s (FXI) Lenovo (LNVGY) saw its PC shipments fall by 8.5% YoY to 12.2 million units. Hewlett-Packard saw the steepest fall of 10.8% in PC sales to 11.6 million units in 1Q16.

As you can see in the above graph, Apple’s (AAPL) market share rose from 6.7% in 1Q15 to 7.4% in 1Q16. Lenovo’s market share rose from 19.4% to 20.1% in the same period. Dell’s market share rose from 13.4% in 1Q15 to 14.9% in 1Q16 with total shipments of 9 million.

Hewlett Packard’s market share rose marginally from 19% in 1Q15 to 19.2% in 1Q16. Asus saw a rise of 0.2 percentage points to 7.2% in 1Q16.

Apple makes up 12.9% of the Technology Select Sector SPDR ETF (XLK).


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