The maker of expensive printer ink, HP, reported revenue increases in its first quarter, but that was not enough to keep shareholders happy.
That might have something to do with CEO Dion Weisler stories about the struggles HP is facing in the printer supplies space and the fact he lowered the vendor’s full-year outlook.
HP’s shares fell by 12 percent in after-hours trading after the firm published its financial results for the first quarter of the year.
Revenues grew by a slim one percent year on year in the first quarter to $14.7 billion. Its PC business – called Personal Systems – increased revenues by two percent to $9.66 billion, missing analyst estimates of $9.74 billion. Total units sold declined by three percent in the first quarter, with notebook units down one percent and desktops down eight percent. Commercial trumped consumer sales with three percent growth against one percent.
Its printing arm similarly failed to meet expectations and declined by 0.7 percent year on year to $5.06 billion, marginally below Wall Street’s $5.19 billion target.
HP CEO Dion Weisler said the firm’s PC division is performing well despite operating in a tough market.
“Our Personal Systems team continues to perform at a high level, driven by relentless focus on execution and profitable growth. As expected, the first-half headwinds we previously shared with you are playing out. But we are navigating them well. We are also strengthening our position in strategic segments where we see pockets of growth and delivering differentiated and premium hardware services and solutions”, he said.
HP has oversaturated its EMEA channel with printer supplies
Printer supplies performed below expectations, and Weisler said HP is battling against online platforms selling third-party products. More commercial customers are now buying online, he said.
“We are essentially fighting the same war but we are now engaging on a new battlefield and it’s called online.”
“Online office is a growing market for alternatives and we are seeing more commercial customers moving to online where our overall share, while still leading, is not as large.”
He added: “We just can’t bring a musket to a drone fight. Most importantly, what are we going to do about it? First, we need to continue to evolve that go-to-market and expand our online initiatives as well as our targeted marketing and we’ll certainly be doing that.” Whatever all of that means.
