HP CEO Weisler: 'Strong Innovation,' Partner Wins Drive Third Straight Quarter For Both PC And Printing Sales Growth

HP Inc. CEO Dion Weisler says the company "is strong and getting stronger" in tandem with its channel partners, as HP reported its third consecutive quarter of revenue growth in both its personal systems and printing businesses.

"We've never been more competitive, more fixated on the customer, more innovative, and more focused on operational excellence than we are today," Weisler said during the company's quarterly conference call Tuesday, later noting that partners are "doing an incredible job of delivering growth."

For HP's fiscal 2017 fourth quarter, ended Oct. 31, the company reported that revenue grew 6.6 percent to $13.93 billion, due to the upward trajectory in both of its core businesses. HP's quarterly earnings came out just as Meg Whitman, who had overseen the 2015 split of Hewlett-Packard into Hewlett Packard Enterprise and HP Inc., revealed plans to step down as CEO of HPE as of Feb. 1, 2018. Whitman will be succeeded as CEO by HPE President Antonio Neri.

[Related: 5 Things You Need To Know About HP's $1.05B Acquisition Of Samsung's Printer Business]

HP's results, which represented an increase from $12.51 billion in sales during the same period a year earlier, beat a consensus estimate from Wall Street analysts of $13.35 billion in revenue for the quarter.

HP met analyst expectations on profits with non-GAAP diluted net earnings of 44 cents per share. Non-GAAP net earnings totaled $749 million, up from $614 million the year before.

In the personal systems business, HP achieved double-digit sales growth for the fourth consecutive quarter.

"Personal systems had another stellar quarter—driving growth, gaining profitable share, and delivering impressive innovations," Weisler said. "This team is hitting their stride with truly outstanding performance."

The personal systems business--which includes PC products such as notebooks, desktops, and workstations—in fact picked up the pace during the recent quarter, with growth of 13.2 percent year-over-year.

That marked the biggest quarter of growth for personal systems during all of HP's fiscal 2017, at a time when the PC market overall remained sluggish and costs increased significantly for memory components.

HP has continued to bring "strong innovation" to the PC market with products such as the first-ever detachable workstation, the HP ZBook x2, Weisler said during the conference call.

The HP personal systems business generated sales of $9.08 billion for fiscal Q4, up from $8.02 billion a year earlier.

Notebooks sales grew the most, surging by 16.2 percent to $5.39 billion, while desktop PC sales grew 9.7 percent and workstation sales expanded by 7.5 percent year-over-year.

In device-as-a-service, "we are seeing strong wins by our channel partners," Weisler said during the conference call.

Research firm IDC reported that HP grabbed 22.8-percent share in the global PC market during the quarter, up from 21.4 percent a year earlier, thanks to 6-percent growth in unit sales. That put HP atop the global PC market, and the growth contrasted with essentially flat results from runners-up Lenovo, Dell, and Apple.

Stephen Monteros, vice president of sales for public sector at Eagan, Minn.-based ConvergeOne, said HP is benefiting from reaching "stability" in its operations in recent quarters, following the major changes at the company after the split from Hewlett Packard Co. two years ago. Partners "are feeling that the footing is solid," he said.

HP right now is seeing "good product design, stable policies, stable field representation," Monteros said. "Everything is just kind of coming together for them."

In particular, solution providers such as ConvergeOne are benefiting from taking part in HP's device-as-a-service offering, which is successful partly because HP was "one of the first manufacturers really to drive [device-as-a-service] forward," he said.

Overall at HP, "they've always been partner-centric, and they've continued that way," Monteros said.

Meanwhile, HP's printing business grew 7 percent to $4.88 billion during the fiscal fourth quarter, up from $4.56 billion during the same period a year ago.

Driving that growth was the ever-critical supplies business, which expanded 10 percent year-over-year to $3.13 billion in sales for HP's fiscal Q4. However, sales of HP commercial hardware for printing slid 19 percent from the same period a year earlier, to $1.12 billion.

Operating margin in HP's printing business improved in the fiscal fourth quarter, to 16.6 percent from 14 percent the year before.

Weisler was also bullish on the prospects for market share growth and partner recruitment in the vendor's A3 copier business. That business got a boost from the recent $1.05 billion acquisition of Samsung's printer business. That acquisition closed Nov. 1 and was not included in the Q4 results.

The acquisition has given HP "an unmatched portfolio" and "incredible disruptive technology" in print, he said. It's also produced new sales opportunities in A4 print that had previously been closed to HP due to the shortfall in A3 offerings, Weisler said.

For fiscal 2017 as a whole, HP reported that revenue grew 7.9 percent to $52.1 billion, up from $48.24 billion during fiscal 2016. Non-GAAP net earnings for all of fiscal 2017 were $2.82 billion, up just over 1 percent from non-GAAP net earnings of $2.79 billion one year earlier.

Read more articles on: