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 user 2008-08-26 at 12:36:42 pm Views: 53
  • #20417

    Hewlett-Packard’s Strong Q3 Results Not Shared in Printer Division
    August 2008,Hewlett-Packard’s stronger-than-expected third- quarter performance may have helped lead a rally on Wall Street Wednesday, but its earnings report released Tuesday revealed a decline in its imaging and printing business. While the company reported revenue of $28 billion, up 10 percent year-over-year, its Boise-based imaging and printing division – traditionally accounting for about 27 percent of HP’s revenue – experienced a 14 percent decline.In an investor call on Tuesday, CFO Cathie Lesjak said that consumer printer hardware units were flat and commercial printer hardware units were down 9 percent year-on-year.

    “Within IPG (Imaging and Printing Group) we are focused on reducing our cost with ongoing initiatives to improve supply chain efficiency and lower product costs,” she said. “We are investing these savings in targeted growth areas including the enterprise and graphic arts. We will continue to be prudent in our pursuit of lower end units and will balance growth and profitability to drive long- term results.”President and CEO Mark Hurd, responding to a question from analyst Shannon Cross of Cross Research, said some of that decline was due to a shift toward wireless printers.”You look at a home today, instead of having a printer wired through every desktop PC, you now see many families integrating into one printer or two printers that are networked around the home. We had a 150 percent growth in our wireless printer category this year,” he said.

    “Therefore, we would be quite aggressive in pursuing that market segment in a way that we think makes sense,” he added. “That we would differentiate from a very, very low-end laser with a very low- end connect rate in a single function world that probably wouldn’t bring us much long-term value.”When asked if that meant HP would be shifting to the graphic segment at the expense of traditional printer businesses, Hurd was non-committal.”I think what we want to do is grow in the graphic segment. We think it is a very strategic segment. But I wouldn’t think of it as us stopping doing this to be able to do that,” he said.

    HP’s imaging and printing business, based in Boise, made profits of $2.38 billion on revenue of $14.9 billion in the first six months of the current fiscal year, but is undergoing a reorganization that has fueled rumors of layoffs.Though unwilling to release any statement on whether jobs cuts are in the offing among the more than 3,000 employees at the Boise campus, HP has begun shedding jobs at its Corvallis, Ore. InkJet plant, KTVB reports.

    The reorganization became public in late June, with reports that HP would consolidate its five imaging and printing groups into three, effective Aug. 1. So far no sweeping job cuts have occurred, but several top ranking executives have announced their retirement, including senior vice president of the company’s LaserJet Printing Business Nor Rae Spohn who will leave the company Nov. 1.HP ended the day’s trading at $46.16, up $2.47, or 5.56 percent.