HP posts 14% drop in profit for Q3
PC, printing, servers and software business all slip, while Services division has record profits
HP saw operating profits drop 14% and revenues down 2% in the third quarter of this year, as both PC sales and print supplies business slipped.
Net revenue for the quarter was $27.5 billion, with operating profits of $2.2 billion, with mixed results across company units and geographies.
The Personal Systems Group (PSG), which includes the PC business, saw revenues down 18% to $8.4 billion, although actual unit shipments rose 2%.
The Imaging and Printing Group (IPG) also fared badly, with overall revenue down 20% to $5.7 billion, and print supplies revenue down 13%, mainly due to channel inventory realignment. Revenue and shipments of both commercial and consumer printers were also down.
The Enterprise Storage and Servers (ESS) and Software businesses were both down as well, by 23% and 22% respectively.
HP’s Services division posted a record profit of $1.3 billion, from revenues of $8.5 billion, a 93% increase in revenue. The rise was primarily due to the acquisition of EDS. Services revenue now accounts for 15.2% of total revenue for the company.
Mark Hurd, HP chairman and chief executive officer said in a statement: “HP’s performance this quarter is a result of our strong business portfolio, efficient cost structure and scale. We made positive gains in extending our market leadership in key segments and strengthening our competitive position. Business is stabilizing, and we are confident that HP will be an early beneficiary of an economic turnaround and will continue to outperform when conditions improve.”
By region, revenue grew 8% in the Americas to $12.6 billion, while it declined 12% in EMEA and 4% in Asia Pacific to $9.9 billion and $5.0 billion, respectively.
“Record profit in Services, double-digit revenue growth in China, and solid cash flow demonstrate HP’s ability to execute,” said Cathie Lesjak, HP executive vice president and chief financial officer. “We are investing for the future and executing operational efficiencies with the goal of driving long-term, profitable growth.”