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How Did HP’s Printing Business Perform in Fiscal 4Q16?

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Revenue fall in printing

HP Inc.’s (HPQ) Printing business group reported revenues of $4.6 billion in fiscal 4Q16, which fell by 8% YoY (year-over-year) and 6% YoY on a constant currency basis. The operating profit of this segment was $637 million, or 14% of total revenues.

Supplies constituted 62% of revenues in the Printing segment, whereas Commercial Hardware and Consumer Hardware accounted for 31% and 7% of revenue, respectively.

Revenue from HPQ’s supplies subsegment fell by 12% YoY—10% YoY on a constant currency basis—in fiscal 4Q16. Total Hardware units rose 1% YoY, Commercial Hardware units rose 10%, and Consumer Hardware units fell 3% YoY in fiscal 4Q16.

By comparison, HP’s total hardware units had fallen by 20% in fiscal 1Q16, 16% in fiscal 2Q16, and 10% in fiscal 3Q16. HP expects the trajectory of the revenue from its supplies subsegment to stabilize by 2017.

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During the company’s fiscal 4Q16 earnings call, HP Chief Executive Officer Dion Weisler stated: “We will continue to be disciplined in our hardware unit pricing with a focus on shifting the sales mix towards units that deliver higher value over the lifetime…We are now well positioned as we enter fiscal 2017 and will continue to increase marketing spend to drive HP original supplies brand awareness and end-user demand.”

HP dominates the hardcopy peripherals market

According to research company IDC (International Data Corporation), HP led the worldwide large format printer market with a share of 42% in calendar 2Q16, as compared to 41.5% in 2Q15. The other leaders in this market include Canon (CAJ), Japan’s (EWJ) Epson, Roland, and Mimaki, with shares of 20.5%, 17.5%, 3.2%, and 2.8%, respectively.

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