uploads///HPs quaterly revenues growth

What’s behind HP’s Sluggish Revenue Growth Trend in Q2?

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May. 29 2019, Published 1:08 p.m. ET

HP’s revenues trend

HP (HPQ) delivered upbeat second-quarter revenues of $14.04 billion, which was 0.3% higher YoY than the year-ago quarter and 2% higher YoY, excluding currency. However, the rate of revenue growth has been declining for the past five consecutive quarters, probably due to sluggish sales in the printing and supplies businesses.

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Revenue details 

HP, the world’s leading PC maker, generates more than 60% of its total revenues from its personal systems business. Revenue from the company’s PC division grew 1.8% to $8.9 billion in the second quarter and increased 5%, excluding currency. The company might not be very affected by tariff headwinds despite its production in China, as HP’s manufacturing is diversified.

HPQ’s printing business again disappointed investors after it posted a ~2% YoY decline in printing revenue to $5.1 billion in the second quarter, due to falling ink supplies and weak demand for consumer printers. HP, which acquired Samsung’s A3 printer business in November 2017, posted a YoY decline in the segment for the second consecutive quarter, after delivering positive revenue growth for seven straight quarters.

Peer comparison

Peer NetApp missed revenue estimates in its recently reported fourth-quarter results. Hewlett Packard Enterprise also lagged analysts’ revenue estimates in the second quarter of fiscal 2019, which ended in April. Cisco Systems, however, managed to beat revenue expectations by 0.5% in its third quarter of fiscal 2019 results.

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