- With weak industry demand and a strong dollar weighing on both PC and printer sales, HP Inc.'s (NYSE:HPQ) top-line pressures didn't abate in FQ1: Personal Systems revenue fell 13% Y/Y (6% exc. forex) to $7.47B, and Printing revenue fell 17% (11% exc. forex) to $4.64B.
- Financials: In spite of the sales declines, Personal Systems op. margin only fell by 40 bps Y/Y to 3.1%, and Printing op. margin only by 180 bps to 17%. The reason: GAAP costs/expenses fell 11% Y/Y to $11.3B. R&D spend fell by $12M Y/Y to $292M, and (more notably) SG&A spend fell by $185M to $1.04B. Gross margin fell 70 bps Y/Y to 18.7%.
- Top-line performance: Within Personal Systems, commercial revenue fell 11%, and consumer revenue 16%. Total units dropped 13%, with notebooks declining 8% and desktops 13%. With Printing, hardware units fell 20% (commercial -15%, consumer -23%), and high-margin supplies revenue 14%.
- Also boosting EPS: $797M was spent to buy back 67M shares. HP ended FQ1 with $3.7B in cash and $6.7B in long-term debt.
- HPQ -0.7% after hours to $10.75.
- HP's results/guidance, earnings release