Tough PC Market Challenges ‘Do not Intimidate Us,’ HP Point Man Says

HP said earlier this year it expected to face “several tough quarters” in the PC market, and Q4 ended Oct. 31 “was indeed a difficult quarter and somewhat weaker than we expected,” Dion Weisler, executive vice president-HP Printing and Personal Systems Group, said on a Tuesday earnings call. Tuesday was the last time HP reported earnings as a consolidated company, having completed its “separation” Nov. 1 into two independent firms, HP Inc. and Hewlett-Packard Enterprise. “Following separation, we remain confident that we are well-positioned for the long term in the marketplace,” Weisler said. “The market challenges do not intimidate us and we are keenly aware of what we need to be focused on going forward.” The PC market in Q4 “continued to be tough,” especially in the consumer segment, “where industry channel inventory remained elevated in the market,” he said. Though HP saw “improved performance” in the U.S. in the quarter, the Europe, Middle East and Africa region “remained weak, with market units declining 22 percent year over year,” he said. When the PC markets are down, “our ability to outperform the market profitably is key,” and HP gained unit share in the quarter, he said. “Looking ahead, we expect the PC market to remain challenged for more quarters to come,” he said. One reason is that Windows 10 “has not been a material catalyst for sales yet,” though Microsoft’s newest operating system “continues to receive favorable reviews,” he said. With conditions “tough” in the PC business, “consolidation continues to happen,” Weisler said in Q&A. The “big four” -- HP, Lenovo, Dell and Asus -- are “getting bigger,” and now control 62.5 percent “of the total overall market and growing,” he said. As for inventories, “as we exit Q4, I would say that industry inventory levels are still elevated, but somewhat lower than they were as the markets began to digest the Windows 8 inventory,” he said. But HP’s “inventory position” is now “in good shape with regards to the age profile of that inventory,” he said.