HP Inc.'s PC/printing sales have fallen sharply, indicating more job cuts. With weak industry demand and a strong dollar weighing on both PC and printer sales, HP Inc.'s top-line pressures didn't abate in FQ1: Personal Systems revenue fell 13% yr/yr (6% exc. forex) to $7.47bn, and Printing revenue fell 17% (11% exc. forex) to $4.64bn.
"We have a clear strategy that leverages our strengths, and we are focused on execution, taking cost out of the business and delivering innovations that will amaze our customers and partners," said Dion Weisler, HP's President and CEO. "Although we have some tough quarters ahead, I am confident in the future."
Financials: In spite of the sales declines, Personal Systems operating margin only fell by 40 bps yr/yr to 3.1%, and Printing operating margin only by 180 bps to 17%. The reason was cost-cutting: GAAP costs/expenses fell 11% yr/yr to $11.3B. R&D spend fell by $12m yr/yr to $292m, and (more notably) SG&A spend fell by $185M to $1.04B. Gross margin fell 70 bps yr/yr 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%.