The financial results of HP Inc. (NYSE: HPQ) for the first quarter of 2018 show a positive start. Earnings are above previously issued guidance and the results prompted a 6% increase in share price.
Speaking to analysts and investors Dion Weisler, Chief Executive Officer and President HP Inc., said, “we’re playing our own game … engineering some of the best innovations in our history.”
Headline figures at the Palo Alto, California-based company show first quarter net revenue of $14.5 billion, up 14% on the comparative figure. GAAP diluted net earnings per share of $1.16 are above earlier guidance of $0.38 to $0.42 per share. HP’s operating activities in Q1 provided net cash of $996 million.
Update on 3D printing at HP Inc.
Weisler stated that the first quarter marked, “more milestones for our 3D printing business.” These milestones include the introduction of the HP Jet Fusion 300 / 500 series. Described by Weisler as, “a lower-cost color solution that for the first time in the industry creates engineering grade prototype, functional parts in black or a full spectrum of color, including white.”
With the expansion of the Jet Fusion 3D printing range comes, “a whole new TAM [total addressable market] and importantly, we are now the only 3D printing provider that enables both prototyping and industrial final part production on the same underlying technology platform,” said Weisler.
Another notable recent development is the future collaboration with Dassault Systèmes. This will see HP use Dassault’s SOLIDWORKS 3D design platform, “to unlock new voxel-level possibilities for product developers.”
Wiesler also noted growth in key verticals and winning new customers, including FedEx and the U.S. Marine Corps.
In an ebullient mood Weisler added, “We are leading in the call with sprinkles of magic across our portfolio. We’ve entered adjacent markets with disruptive IP and strategies where we can provide differentiation and accelerate industry shifts. And we’re investing in our future, creating categories with potential upside for decades to come.”
Cathie Lesjak, HP’s Chief Financial Officer, provided further details of HP’s financial results, “our performance remained strong across businesses and geographies. Regionally, year-over-year, Americas grew 10%, EMEA was up 13% and APJ grew 18%, all in constant currency.”
3D printing in fastest growing segment
Segmenting the $14.5 billion in revenue by business unit provides more insight into where this growth is coming from.
Personal Systems Notebooks represents the largest segment by net revenue, accounting for $5.6 billion – a 14% year-on-year increase. The segment with the greatest growth was Printing Commercial Hardware. At $1.1 billion net revenue, this is the fourth largest segment by revenue. However, year-on-year growth was 28%, more than ten points ahead of the next segment, Desktops, when ranked by percentage.
Printing Commercial Hardware includes Office Printing Solutions, including Samsung brands and OEM hardware, Graphics Solutions and 3D Printing, excluding supplies. Printing Commercial Hardware currently represents 7% of the total $14.5 billion in net revenue at HP Inc for Q1 FY2018. HP did not provide further granularity on the 3D printing sales for the quarter.
It is also important to note that not all revenue reported is recurring. During this quarter HP reported the benefit of a one-time tax gain of $1.03 billion.
Lesjak also noted how HP were getting additional value from investment in MJF, “because it’s the same platform now for prototyping as well as production, that’s unusual in the market.” Remarking on challenges to the adoption of 3D printing Lesjak highlighted a theme familiar to many in the industry, “if we’re really going to disrupt this $12 trillion manufacturing industry, we’ve got to get folks to design for 3D. It’s not just replacing a part today that’s injection molded. It’s saying is there a better way to design that part.”
Lesjak also gave an indication of one target market for the new HP Jet Fusion 300 / 500 series, “this lower-price printer is going to get placed in universities so that the new generation really starts thinking about designing from 3D right away.”
Wrapping up the investor call Weisler concluded, “And as I always say, our reinvention journey is just beginning. I’m convinced the best years lie ahead of us, and this year will be no exception.”
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