Monday, November 29, 2010

HPQ Q4FY2010 Printer metrics and commentary

It almost snuck by us with the Thanksgiving break and all, but here are some printer-related highlights from HP's Q4 announcement, last Tuesday.

From the earnings-call transcript:

[from prepared remarks] Leo Apotheker - Hewlett-Packard - CEO, President

IPG achieved another strong quarter, including share gains in both laser and ink, and we continue to innovate around e-Print and web-connected printers. I'm very excited about the opportunity available to us to shape the cloud and mobile Instant-On platform.

[from prepared remarks] Cathie Lesjak - Hewlett-Packard - EVP, CFO

We continued to see momentum in the commercial sector, led by strength in converged infrastructure, managed print services, and commercial printers and PCs. We posted solid double-digit revenue growth across our hardware businesses,...

Commercial printer hardware and PSG commercial revenue grew 22% and 20%, respectively. Additionally, in Services our book-to-bill ratio for the trailing 12 months remains comfortably greater than one.

Imaging and Printing had a strong quarter. Revenue grew 8% to $7 billion, fueled by year-over-year hardware revenue growth of 16%, and supplies revenue growth of 6%. Segment operating profit totaled $1.2 billion, or 17.4% of revenue. Total printer unit shipments increased 14%, and we gained market share across all printing categories, with particular strength in higher-usage segments.

Commercial printer units increased 43%, with multi-function printer units up 83%.
Business ink and wireless printer units were up 22% and 53%, respectively. In addition, we shipped almost two million web-connected printers in the quarter. We continue to innovate across our portfolio. In September, we announced cloud print for businesses, using HP Print Apps, as well as new software capabilities for enterprise printing. In our hardware portfolio, we introduced new products in our Inkjet, LaserJet and Designjet categories. Finally, we are delivering on our growth initiatives in retail publishing and managed print services. During fiscal 2010, we more than doubled our retail publishing install base, and delivered very significant growth in managed print services signings.

[from Q&A]

William Fearnley - Janney Montgomery Scott - Analyst
Thanks. A question either for Cathie or VJ. How should we be thinking about the balance between IPG operating margins and unit growth? I mean operating margin was above 17% in a strong hardware quarter. Is 17 to 17.5 plus the new operating margin target, or do you see having to invest more in sales staff, promotions, things like ePrint, R&D to help keep units strong?

Vyomesh Joshi - Hewlett-Packard - EVP, Imaging and Printing Group
Well, I think IPG had a strong quarter. And we want to continue to invest into unit growth and innovation, because that's really the driving force for IPG continuing to grow revenue. If you look at the unit growth, we want to continue to drive units in 2011.

As a matter of fact, we would like to put at least 20% unit growth for LaserJet in Q1. As far as the innovation is concerned, the ePrint, we are getting very good reception. As I mentioned in the -- our Analyst call, 2 million units in Q4, and 5 million units in calendar 2010. We absolutely believe that our innovation that we are driving will help us to drive more supplies growth, and really establish IPG globally.


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