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 user 2008-08-26 at 12:38:38 pm Views: 58
  • #20591

    Hewlett-Packard’s Strong Q3 Results Not Shared in Printer Division
    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

    “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.