HP 3Q2013 Report Shows Hardware Shipments Up, Supplies Revenue Down
HP released its 3rd Quarter financial report for fiscal year 2013 (from May 1 to July 31) on August 21. The company reported $27.2 billion in revenue this quarter, down 8% from the prior year. Net earnings were $1.39 billion, which was a big improvement compared with 3Q2012’s net loss of $8.86 billion. In 2Q2013, HP suffered the biggest decline in revenues in recent years, a 10% decrease year-over-year (YoY).
The Printing Segment, which accounted for 21% of HP’s total revenue in 3Q2013, reported $5.8 billion in revenue, down 4% compared with the same period last year. Total Hardware shipments were up 5% YoY. Among them, shipments of commercial hardware grew by 12% and consumer hardware, 2%. Supplies revenue, which made up for 66% of the total printing revenue, was down 4% YoY.
According to the transcript posted by Seeking Alpha, Cathy Lesjak, CFO and Executive Vice President of HP said, “Commercial hardware revenue declined 3% year-over-year, while units increased 12%. We experienced strength in low-end laser sales, while high-end revenue declined due to a mix shift in the value segment. We saw good growth in managed services and Indigo sales. Consumer hardware revenue was flat while units increased 2% over the prior year, driven by strong Ink in the Office and Ink Advantage sales.”
HP has now focused more on the high-end ink market and commercial hardware than low-end consumer hardware. Its Ink Advantage program proved to be a success in 2Q2013, and it continued to boost company revenues in 3Q2013.
Meg Whitman, HP’s President and CEO, said on the earnings call, “Business initiatives like Ink Advantage and new products like Officejet Pro X continue to take hold with strong customer adoption. As a result, we are seeing strength in our Ink in the Office program. Overall, we grew hardware unit sales for the first time since 2011, gaining one point of share in both Ink and Laser over the prior year and five points of share in Laser over the prior quarter. ”
Whitman believes that “The Ink in the Office, Ink Advantage, Ink Subscription, multifunction printers, managed print services (MPS) are all designed to drive more supplies per unit.”
Wall Street expects HP will have $28.12 billion revenue in the 4th quarter of its fiscal year 2013.
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