Kamis, 23 Januari 2014

HPQ Q3FY2010 Printer metrics and commentary

From the Earnings teleconference, here are the comments and number.

From HP Earnings Teleconference Q32010 August 19 2010

Available at HP Investor Relations site.

(Opening summary, as presented by interim CEO Cathie Lesjak)

Looking at the details of our performance by business. Revenue in the imaging and printing business grew 9% to $6.2 billion, fueled by year-over-year unit shipment growth of 16% and supplies revenue growth of 5%. Commercial hardware revenue increased 28%, while consumer hardware revenue grew 4% compared with the prior year quarter. Segment operating profit totaled $1 billion, or 16.9% of revenue. We continue to lead the market with innovative new products. In June, we launched the ePrint platform and the ePrint Center and announced we were expanding our portfolio of web-connected printers to include all printers above $99. This strategy is driving success with third quarter consumer Inkjet hardware shipments up 9% year-over-year, led by 64% growth in wireless printers and OfficeJet growth of 16%.In addition, our retail publishing footprint continues to expand both in the US and across the world. Commercial printer unit shipments grew 44% with strong mono and color laser shipments as hardware availability improved significantly from the prior quarter. We continue to see strong momentum in our growth initiative in the enterprise and commercial print market, both graphic arts and managed printer services grew double digits. Multi-function printer shipments increased 47% over the prior year period, and HP Indigo Digital Press page volume was up 22%. We will continue to aggressively target these markets, leveraging our technology leadership to drive the shift from analog to digital printing.

(Selected Q&A – printer and supplies related questons and answers)

Brian Alexander - Raymond James - Analyst

Thank you. Good evening. Cathie, you mentioned increasing investments in R&D and sales and marketing in your prepared remarks. It seems like a quite a few investors believe the next CEO might decide to noticeably step up the pace of investment as they assume the Company has systematically underinvested in recent quarters, so the concern is this would create near term margin pressure and perhaps even a reset of earnings expectations, so Im just wondering if you could address the premise that HP has been underinvesting and do you plan to reflect the possibility of the next CEO investing more aggressively when you provide the FY 2011 outlook at your analyst day?

Vyomesh Joshi - Hewlett-Packard - EVP - Imaging & Printing Group

Brian, this is VJ. At Ipex, we introduced our next generation of Web Press, we got a phenomenal feedback. On June 6, we introduced all of our new web connected printers, that below $99, every single printer will have an e-mail address and you could see the results. We gained two points of market share in Inkjet. We had 16% unit growth in every single category, we are increasing our market share so from an innovation point of view, we are on fire. As a matter of fact, the feedback that we get that the product portfolio that we have right now is the best in the last six years.

Ben Reitzes - Barclays Capital - Analyst
Yes, thanks. Could you talk a little bit about what youre seeing in the businesses from this context? I mean, I think some might be surprised that a lot of the revenue upside was in PCs and services versus my model and obviously theres been strength in enterprise and theres been strength in printers for some, and I just would have thought maybe supplies or some of the other things might have picked up more. I was wondering if theres shortages there and if you could just talk about the segments a little more because I think PCs were a lot better than expected and services revenue as well, and some of the others look like there might still be some shortages and what not heading into the next quarter.

Cathie Lesjak - Hewlett-Packard - CFO, Interim CEO

So Ben, in terms of supplies growth, so we had 5% supplies growth year-over-year and on a constant currency basis that was8% supplies growth, so still, quite strong supplies growth and as weve talked most of this year, we have this roughly threepoints of currency headwind and we see that continuing into Q4, so if you think about supplies growth, we think about it in terms of kind of reported mid single digits and on a constant currency mid to high single digits for Q4.

Ben Reitzes - Barclays Capital - Analyst

And was there still constraints in the quarter?

Vyomesh Joshi - Hewlett-Packard - EVP - Imaging & Printing Group

No, I think-- this is VJ, Ben. There are no constraints. I think the LaserJet you can see 44% unit growth that we delivered and clearly, we have a tremendous demand here. The LaserJet brand is fantastic, and we are expecting in fourth quarter at least30% unit growth for the LaserJet, so we believe that the demand is strong, we continue to get out of the availability and in the supplies, youll also remember that we are gaining share against refill and reman so we are really driving our supplies sell out, we absolutely believe that putting more units now and valuable units and with web connectivity and the stuff that we are doingwith ink in the office we will continue to see very good growth.

Bill Fearnley - Janney Montgomery Scott - Analyst

Yes, thanks. If I could address the question of VJ in printing. It appears that the supply chain is fixed and so with the strong hardware performance this quarter, you still came in at the high end of the 15 to 17% range, so should we start, should we bethinking about IPG operating margins in the 16 to 18% range given that the strong hardware performance and then I have aquick follow-up.

Cathie Lesjak - Hewlett-Packard - CFO, Interim CEO

Let me address that. We dont let VJ talk about those things. Our guidance for this year is 15% to 17% and were not really changing that at this point. We will talk more about what our guidance is for 2011 at our security analyst meeting. Our goal isto get as much growth as we can in the good usage hardware units and stay within our 15 to 17%.

Bill Fearnley - Janney Montgomery Scott - Analyst

And have you seen any effect of the expanded Canon relationship any benefit there in the most recent quarter?

Vyomesh Joshi - Hewlett-Packard - EVP - Imaging & Printing Group

I think we have started with the copier lineup. We like the lineup that we got. We are selling managed print services , we had a very good quarter, sort of what total contract value for managed print services and I think the very important part is we want to continue to invest and innovate because innovation is our blood line so we want to make sure that not only do we place high usage unit but also we continue to innovate.

Jeff Fidacaro - Susquehanna Financial Group - Analyst

Great. Thanks for taking the question. Just on the supply side grew 5% in the quarter. Could you talk a little bit about how the inventory looks there? Was there any points contributed to a channel fill and I may have missed this but how is the fiscal fourth quarter shaping up, is that sort of a mid single digit type growth again?

Vyomesh Joshi - Hewlett-Packard - EVP - Imaging & Printing Group

I think the channel looks very satisfying as Cathie mentioned. We are focused on making sure that we put the right units in the place and get the right sell out. As far as the Q4 is concerned, we continue to look at the mid single digit range.

Cathie Lesjak - Hewlett-Packard - CFO, Interim CEO

And I think I should have said that we got the 8% constant currency growth without channel, the benefit of any channel fill, unlike some of our competition.

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