HP Reports Strong Performance in Printing in 2Q2013

On May 22, HP announced its financial results for the second quarter of 2013. Net revenue for 2Q2013 was $27.6 billion, down 10% from the prior year. Non-GAAP net earnings were $1.7 billion, or 13% less compared to net earnings of $1.9 billion for 2Q2012.

According to the report, Net Printing revenue was $6.1 billion a 1% year over year (YOY) decline with a strong operating margin of 15.8% which was $958 million. Total Hardware units were down 11% YOY. Commercial Hardware units had a 5% YOY decline, and Consumer Hardware units decreased 13% YOY. HP said the results in 2Q2013 were driven by the better than expected performance in Enterprise Services and Printing.

About the strong performance in Printing, Meg Whitman, HP President and CEO said, “We sustained the strong performance we saw in the first quarter with margins in 2Q2012 of 15.8%, up 2.6 points over the prior year. We are seeing business initiatives like Ink Advantage gain strength in the market and demand for new products like the Officejet Pro X outstripped supply in the quarter, despite ramping our production 32% faster than we’d planned.”

Meg Whitman also stated that the company beat the upper end of their non-GAAP diluted EPS outlook for 2Q2013 by $0.05 per share, driven by better than expected performance in Enterprise Service and Printing. But it was also related to the restructuring savings and improvement in their operations. HP gained 2.6 points of share and high value ink and increased share in multifunction printers by 2 points over the prior year. Besides, she said the company will keep driving technology and business model innovations to maintain their market position. Also, HP plans to launch a new Instant Ink program and a subscription-based pricing model to help drive usage in the home and small business markets.

Cathie Lesjak, HP’s EVP and CFO, added, “Non-GAAP gross margin of 23.7% was up 50 basis points YOY, driven by margin improvements in Printing, unfavorable supplies mix and higher average prices for consumer hardware units.”