Commercial print boost for HP in positive Q2 results

Richard Stuart-Turner
Friday, May 28, 2021

HP has reported revenue and profit growth in Q2, including a significant sales increase for its commercial print offering.

Lores: "Our performance reflects the relevance of our technology in an increasingly hybrid world"
Lores: "Our performance reflects the relevance of our technology in an increasingly hybrid world"

The manufacturer recorded total sales of $15.9bn (£11.2bn) for the three-month period to 30 April 2021, up by 27.3% year-on-year and by 1.5% on the previous quarter.

Revenue in the firm’s printing division (including office, consumer and graphics) climbed by 28% from $4.16bn in Q2 last year – a period affected by the initial impact of the coronavirus pandemic – to $5.32bn. Sales were also up by 6% on the previous quarter.

After falling by 11% year-on-year in Q1 to $957m, HP’s commercial hardware sales (which includes graphics solutions and 3D printing) recorded a 34% increase year-on-year in Q2, to $1.09bn – also up 13% on Q1.

Consumer hardware fell by 4% on the previous quarter, to $901m, but was up by 77% year-on-year. Q2 sales of supplies, the largest part of the division by revenue, increased by 17% year-on-year, and by 6% on the previous quarter to $3.34bn.

HP’s personal systems division, which comprises workstations, notebooks, desktops and other, saw net revenue increase by 27% year-on-year to $10.6bn, and this was flat on the previous quarter.

The company’s Q2 net earnings jumped from $764m, or 53 cents per share, a year ago, to $1.23bn, or 98 cents per share.

Profits in the printing segment were up by 73.5% year-on-year, from $548m to $951m, albeit this was a decline on the $998m recorded in Q1. Profits in personal systems, meanwhile, increased by 28.6% from $552m a year ago to $710m. This was down from the $758m achieved in Q1.

The company’s overall profits though were up on both comparable periods, with the $1.34bn recorded in Q2 up by 61.7% on the Q2 2020 figure of $826m, and by 3.1% on the Q1 2021 figure of $1.3bn.

In a webcast held following the publication of the results yesterday afternoon (27 May), HP president and chief executive Enrique Lores said: “It was another exceptional quarter of double-digit top and bottom line growth in which we delivered well above our guided range.

“Our performance reflects the relevance of our technology in an increasingly hybrid world, the resilience of our business model, and the operational excellence of our team.

“I also want to highlight secular trends driving sustained demand across our portfolio. HP technology and services are at the heart of hybrid work. We are accelerating our strategy to drive long-term sustainable growth. This includes continuing to transform the way we operate and deploy our substantial cashflow to maximise value creation.

He added the company’s results “reflect continued strong growth in consumer, as well as improvement in our commercial businesses as economic activity increased”.

“It is important to note that these results are against the backdrop of industry-wide component shortages and supply challenges.

“Currently there is not enough supply to keep up with the robust demand, and the resurgence of Covid in South East Asia is creating additional pressures on our supply chain.

“We expect supply constraints to continue at least through the end of 2021. Although the environment will likely remain dynamic, we are taking actions to navigate through the challenges, enabling us to deliver strong results and increase our outlook for the second half.”

HP Inc’s share price climbed slightly yesterday afternoon, after a slight dip earlier in the day, but stood at $32.10 at the close of trading, which was down 0.22% on where it had opened yesterday.

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