Weisler: HP Inc. Is Making 'Solid Progress' Amid Difficult Market Conditions
HP Inc. CEO Dion Weisler on Wednesday told analysts that the $55 billion company is making "solid progress" in protecting its core printing and PC business in the midst of "difficult market conditions," while at the same time investing in future high-growth areas like 3-D printing.
Weisler's comments came after the company, which split off from Hewlett Packard Enterprise last year, posted better-than-expected non-GAAP diluted net earnings of 41 cents per share for its fiscal second quarter, ended April 30, above the Wall Street consensus of 38 cents per share.
"Delivering on our financial commitments is evidence of the solid progress we are making to protect our core, deliver on growth and invest in our future," Weisler told analysts.
HP shares were up 2 percent, or 20 cents per share, to $12.40, in after-hours trading Wednesday. That came after HP shares closed up 2 percent, or 29 cents, to $12.20.
HP Inc. sales for the quarter were $11.6 billion, down 11 percent, compared with $12.97 billion in the year-ago quarter. HP's printing net revenue was down 16 percent, to $4.63 billion, compared with $5.50 billion in the year-ago quarter. HP's Personal Systems net revenue, meanwhile, was down 10 percent, to $6.99 billion, compared with $7.75 billion in the year-ago quarter.
HP had year-over-year constant currency growth in commercial notebooks, commercial mobility, commercial services, managed print services and graphics printing solutions, said Weisler.
"It was a really solid quarter," said Weisler in an interview with CRN after the earnings call. "I am really proud of how the team stepped up and delivered for our customers, because if we have happy customers, everything else will take care of itself. The innovation engine is alive and well."
HP Inc. recently held its first partner advisory board meeting and has gotten positive feedback on the product portfolio and future product road map, said Weisler. "Our partner community is really excited about the work we are doing," he said. "We have received some amazing feedback -- comments like the portfolio is the best we have ever had. "
Bob Venero, CEO of Holbrook, N.Y.-based solution provider Future Tech, No. 232 on the CRN 2015 Solution Provider 500, credited HP for investing in breakthrough innovation in a difficult PC and printing market environment. "The earnings shows that the split from HPE is definitely having a positive impact," he said.
HP Inc. anticipated the treacherous PC and printing market conditions, said Weisler, and is on track to reduce its cost structure by $1 billion this year. About 800 jobs were eliminated in the quarter and the company is on track to eliminate up to 3,000 positions in the current fiscal year.
As for the launch just last week of HP Inc.'s eagerly anticipated HP JetFusion 3-D Printing Solutions, Weisler said the new offering marks a major step forward in "igniting what could be the next industrial revolution." The new commercial production manufacturing 3-D printing products, which will be available starting in late 2016, deliver manufacturing parts 10 times faster and at half the cost of current 3-D printing products, said Weisler.
"Our products deliver the speed, cost, quality and economics that will help democratize manufacturing and help deliver mass customization," Weisler told analysts. "These systems leverage decades of HP's R&D print expertise and thousands of patents. We are building a whole new partner channel for 3-D printing and will continue to grow our ecosystem of co-development and technology partners in powerful industries like automotive, aerospace, medical and consumer goods."
Weisler told CRN that the "certified" channel model for the 3-D printer market is critical to the strategy. "We are in the process of working through the existing channel partners that are serving the 3-D customers today," he said. "In addition to that we are working through our more than 250,000 existing channel partners and there are some of those folks who are willing to make some real investments in 3-D printing."
HP is planning several announcements at the Drupa printing conference in Dusseldorf, Germany, in the first week of June, said Weisler, with enhanced commercial graphic printers set to be unveiled along with an expanded digital packaging portfolio. "We are the largest exhibitor at Drupa," said Weisler.
The HP Elite x3 Windows 10 smartphone-sized product, announced earlier this year, which allows customers to access everything they need on a single device -- including legacy Windows applications -- is generating strong interest from partners, said Weisler.
"Some of the more forward-thinking partners understand the workflow transformation that these products enable are beginning to invest and shape themselves to take advantage of the technology," he said.
HP has also won plaudits for the recent introduction of its Spectre 13 laptop, which is being billed as the world's thinnest laptop -- competing directly against the Apple MacBook. That product helped drive double-digit sales growth year over year in that market segment, said Weisler.
"It is thrilling to see the innovation coming out of HP supporting our core, growth and future initiatives," said Weisler.