’s new boss will have the same problem as the old boss: How to make the ink run right.
The storied tech pioneer said Thursday that CEO
is stepping down for family health reasons. Mr. Weisler has run HP since the company split from the other half of the Hewlett Packard empire in 2015. He will be succeeded by
who has been running the printing business since the split.
As such, Mr. Lores should have little trouble coming up to speed on the company’s biggest problem. While most of HP’s revenue comes from personal computers, most of its profit comes from the printing side, specifically print supplies. That business has been slipping since earlier this year and is getting worse. The company’s fiscal third quarter results posted Thursday showed printing supply revenue falling 7% from a year earlier to about $3.2 billion. That is the worst decline for that business in three years and notably more than the 2% drop expected by analysts.
Strong PC sales helped offset the hit, bringing overall revenue for the quarter in line with Wall Street’s projections. But that was no surprise, given strong industry data reported last month by market research firms IDC and Gartner. And investors watch HP’s supplies business closely, given the outsize impact on the bottom line. HP shares slid 17% in February after the first print supply miss. Thursday’s report took the stock down another 6% after hours.
HP says the supply problem is confined to its non-U.S. regions. It also says it is taking aggressive steps to address the issue. But the problem has persisted for nearly a year now, and a near-term resolution doesn’t seem at hand. HP shares might look cheap at just eight times forward earnings, but Mr. Lores will need to get the ink business back in line before investors will want to hook back up.
Write to Dan Gallagher at firstname.lastname@example.org
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