Thursday, August 16, 2007

The $100 Billion "Printer Company"

Back in the late 1990's, the CEO of one of HP's (NYSE HPQ) key competitors in the workstation business loved to needle HP with what to him seemed to be the ultimate insult -- HP's really "just" a "printer company", implying that due to the company's dominance in the printer business that they weren't to be taken seriously as a full service IT supplier. Well, HP just announced results highlighted a blow-out top line, a $25B revenue fiscal third quarter. That's a 16% year-to-year growth rate, and with improved margins, EPS grew 37% on a non-GAAP diluted basis. Before I get too far out of my field of expertise, I'll get back to my printer analysis and be back with a post on some of the details but here's one high-level one to consider. Printer and imaging posted a healthy 8% year-to-year revenue gain, meaning the unit actually DRAGGED DOWN overall corporate sales growth. This is actually the third quarter in a row where the IPG sales growth rate was below that for the overall company, but never by such a dramatic margin. Wow!

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