HP Inc strips off, rolls around as Windows 10 money pours down

HP Inc's latest set of financials were boringly positive – from a rival's perspective – rising as they did by double digits.

"Q3 was impressive," CEO Dion Weisler told a gaggle of Wall Street types on an earnings call. And it was based on a "balanced performance across businesses and regions", he added.

Group turnover for HP's Q3 of fiscal '18 ended 31 July went up 12 per cent to $14.6m, boosted by businesses still refreshing commercial PCs to Windows 10 and the lingering benefit of buying Samsung's A3 line.

The Personal Systems unit bounced 12 per cent year-on-year to $9.395bn; notebooks were up 13 per cent to $2.869bn, desktops grew 12 per cent to $2.869bn and workstations climbed 11 per cent to $304m. Commercial revenue was up 13 per cent and consumer rose 10 per cent, HP said.

Weisler added that customers were aware of the "Windows 7 sunset" – Microsoft ends support for the OS next year – and a migration a "little smoother than it has been in the past" to the next OS continued.

"We think that's a positive stimulus in the market."

HP outpaced the PC market in calendar Q2 – according to Gartner it grew 6.1 per cent to 13,589,000 units as the total sector grew just 1.4 per cent to 62,095,000. Lenovo and Dell grew faster than HP but for context Lenovo sold 12 million more PCs than HP.

"Profitable growth continues to be our priority," said the CEO.

Profit before tax in Personal Systems was $365m, up from $313m a year earlier. Operating margins improved 20 basis points to 3.9 per cent driven by higher average sales prices due to a currency lift and favourable mix of product sales.

In the Printing division, turnover jumped 11 per cent to $5.188bn: the supplies unit was up 8 per cent to $3.405bn, commercial hardware was up 24 per cent to $1.170bn, and consumer hardware grew 4 per cent to $613m. The overall printer market was up 1 per cent in calendar Q2, HP Inc said.

Weisler said it benefited from the A3 line and extended the A2 portfolio to offer cheaper colour devices. In the quarter, HP bid for managed print and document dealer Apogee and invested in direct and reseller sales.

The head of 3D Printing business, Stephen Nigro, is retiring in early 2019 and Christoph Schell, currently head of HP's Americas business, will take on the position, Weisler confirmed.

The Printing business reported a profit before tax of $832m, versus $807m a year ago, taking group pre-tax profit to $1.018bn, compared to $899m. ®