...let me highlight three reasons I'm confident in HP's outlook despite the macroeconomic challenges...our business mix. [One reason is] we have approximately one-third of our revenue and well over half of our profits from recurring sources, like Services and Supplies. Although not immune to economic factors, the future performance of these businesses is largely determined by the quality and sale of our customer installed base.
While some skeptics have emerged among today's Tuesday-morning quarterbacks, forcing the stock down some (e.g. see "Hewlett-Packard hit by worries about forecast"), it's worth singling out the printer business, and specifically its growing Managed Print Services (MPS) component, as a major contributor to Hurd's logic. Supplies grew to 64% of the Imaging and Printing Group's (IPG's) revenues, and while that's an across-the-printer-board metric, MPS growth, while not detailed in the release, is certainly growing, with a proxy to be seen it the 25% growth figure announced for Printer-based MFP's, a standout number among otherwise mostly-declining category growth rates.
(This post also appears on Printer Industry News.)