HP Inc's Personal Systems (PC division) revenue fell 10% yr/yr in FQ2 to $7bn, after having dropped 13% in FQ1 as it tried to push up printer hardware prices while moving to boost supplies income through contracts. Job cuts helped the division's operating profit rise by $15m to $242m. Commercial business PC revenue fell 7%, and consumer revenue 16%. Notebook units fell 6%, and desktops 10%.
Printing revenue fell 16% to $4.6bn, after having fallen 17% in FQ1. Operating profit fell to $801m from $982m. Printer units and supplies revenue each fell 16%. Commercial printer units dropped 12%, and consumer units 18%.
CEO Dion Weisler says that it has pushed up prices and the market is getting better. “We said the markets were going to be tough for at least several quarters. We are on track to reduce our cost structure by more than $1bn in FY16 through productivity initiatives and an acceleration of our three year restructuring plan into this year. We executed a number of cost sections including a reduction of approximately 1200 headcount year-to-date and are on track to achieve our savings objective by year end.”
“We will be rational in how we price in our core competitive markets. In Q2 we achieved another quarter of sequential ASP improvement in print hardware. While these actions did pressure hardware unit placement we are starting to see more rational pricing in the market. Over time we are working to shift the install base to units with higher supplies usage.”
As the industry continues to shift from transactional to contractual sales HP and its partners are differentiated with a secure managed print services offering, he says.