Execs from HP revealed difficulties it is facing with supply shortages during its Q2 results earnings call.
- Zoom Partners with HP for Modular Meeting Pods
- Tech Data Adds HPE As Funding Partner to TaaS Offering
- Bose Expands Videobar VB1 Availability with HP
Reduced supplies are hampering HP’s print and PC sectors. Regarding print, HP expects shortages in the supply chain and logistical delays to curb revenues to continue throughout 2022, with some improvement towards the end of the year.
From a PC standpoint, the supply issues are primarily due to one of HP’s PC component suppliers, which is struggling with production in one of its factories. This will impact shipments in Q3, although HP believes it will recover in Q4.
Despite these setbacks, it has been a good quarter for HP overall, which gained $16.5 billion in revenue, representing a 4% growth year-over-year.
Enrique Lores, President & CEO at HP, said: “In Personal Systems, revenue grew 9% to $11.5 billion. This was our highest Q2 revenue ever, reflecting the durability of PC demand.
“We also delivered an operating profit margin of 6.9% at the high-end of our target range. We are managing our PS portfolio with great discipline and are focused on driving profitable revenue growth more than units.
“Our continued mix shift towards commercial and premium combined with our pricing strategy allowed us to more than offset fewer unit shipments in the quarter. Increased spending on hybrid work solutions is driving strong commercial PC demand.
“Personal Systems delivered almost $800 million of operating profit with operating margins of 6.9%. Our Personal Systems business has grown its operating profit margins in 17 of the last 18 quarters.
“This consistent performance is indicative of our strong portfolio, the strong secular tailwinds we continue to see and our ability to deliver results in very different environments.”
HP revealed reduced demand in the consumer side of its business, which has been down 6% year-on-year. However, it is still outperforming pre-pandemic levels, and consumer peripherals grew 40%.
Further positive news came from its 3D printing division, which hit double-digit revenue growth. HP also announced its partnership with Legor Group, a luxury jewellery production company, this quarter.
Poly was also acquired by HP this quarter, but it has not been included in HP’s GAAP guidance because it was too recent. HP’s CEO said Poly would strengthen its hybrid work solutions and increase peripheral and workforce solutions growth.
The CEO of HP also spoke about some of the global factors at play in its business. First is the aforementioned industry-wide component supply shortages. Second, the COVID-related disruptions in China will affect its Q3 earnings. Finally, the Russia-Ukraine war has impacted its revenue, with Russian business accounting for approximately $1 billion in 2021. HP has stopped sending shipments to Russia and Belarus since February, and it is now ending operations there completely.
The CEO of HP also spoke about its environmental efforts: “From 2019 to 2021, we achieved a 9% absolute reduction in our greenhouse gas emissions across HP’s value chain. I am proud that we continue to decrease absolute emissions while our net revenue increased by 8% during the same period.
“We have reduced single-use plastic packaging by 44% compared to 2018. And we have enabled better learning outcomes for over 74 million people globally since 2015 by providing curriculum, training and technology.
“I am inspired by the progress we are making toward becoming the world’s most sustainable and just technology company. Not only are these the right things to do, but they are also differentiating our brand and helping to drive our business.”
Looking to the future, the Chief Financial Officer at HP, Marie Myers, believes it has performed well against the priorities it set for itself so far this year. Myers shared HP’s stock price predictions which include a four cents incremental GAAP-only charge due to closing Russian business operations. She also expects its free cash flow to be at least $4.5 billion in the 2022 financial year.
from UC Today https://ift.tt/5E708LW
0 Comments