Full-year and Q4 print revenue down for HP

Richard Stuart-Turner
Thursday, November 26, 2020

HP Inc’s sales in its Printing division and its overall revenue both showed declines in Q4 and for the full-year.

Lores on HP's print results: "We delivered a strong quarter relative to the market conditions"
Lores on HP's print results: "We delivered a strong quarter relative to the market conditions"

The manufacturer recorded total sales of $56.6bn (£42.4bn) for the 12-month period ended 31 October 2020, down 3.6% from $58.8bn a year earlier. For the three-month Q4 period its revenue was down by 1%, from $15.4bn to $15.3bn.

Revenue in the firm’s printing division dropped from $20.1bn to $17.6bn for the full-year, and from $4.98bn to $4.83bn in Q4. The Q4 operating margin for the segment, which comprises supplies, commercial hardware and consumer hardware, was 14.8%.

HP’s Personal Systems division, which comprises workstations, notebooks and desktops, saw net revenue effectively flat year-on-year in Q4 at $10.4bn, but up by 1% for the full year, where revenue in the division climbed from $38.7bn to $39bn.

Printing segment profits fell by 8.2%, from $777m in Q4 2019 to $713m, while profits in Personal Systems dropped by 5%, from $556m to $528m.

The largest amount of sales in the Printing division was contributed by Supplies, which saw year-on-year revenue drop in Q4 by 1% from $3.16bn to $3.13bn.

Commercial hardware sales fell by 22% year-on-year, from $1.18bn to $923m in Q4, while consumer hardware climbed by 21%, from $640m to $772m.

For the full-year, Printing segment profits fell by 22%, from $3.2bn to $2.5bn, while profits in Personal Systems climbed by 22%, from $1.9bn to $2.3bn.

The largest amount of sales in the Printing division was again contributed by Supplies, which saw a year-on-year revenue decline of 10%, from $12.9bn to $11.6bn.

Commercial hardware sales for the full-year dropped by 23%, from $4.6bn to $3.5bn, while consumer hardware was down by 1% on last year, from $2.53bn to $2.52bn.

The company’s Q4 net earnings were up from $388m, or 26 cents per share a year ago, to $668m, or 50 cents per share. For the full year they dropped from $3.15bn, or $2.08 per share, to $2.84bn, or $2.01 per share.

In a webcast held following the publication of the results on Tuesday (24 August), HP president and chief executive Enrique Lores said: “Looking at our performance, two themes stand out that are consistent across both print and personal systems. HP’s broad and differentiated portfolio and leadership across consumer and commercial markets makes our company more resilient across business cycles.

“And secondly, our operational execution including our disciplined pricing, strategy cost reductions, and supply chain agility help us navigate in a very dynamic environment.

“Underpinning it all is a purpose-driven culture built on strong corporate values. Our founders used to say that the greatest competitive advantage is doing the right thing at the worst time.

“And our teams have lived up to this idea through a tremendously difficult year, consistently stepping up to do the right things for our business, our customers and our communities around the world. This is who we are as a company, and I could not be more proud.”

Turning to the print division, he added “we delivered a strong quarter relative to the market conditions”.

“Covid-related effects on both supply and demand have continued to impact our printing results. From a demand perspective, ongoing demand for consumers’ hardware and supplies combined with disciplined pricing substantially offset the declines in commercial print.”

HP returned $4.1bn to shareholders in the form of share repurchases and dividends for the full-year.

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