HP to Increase Printing Supplies Prices

By Reuters -  |  Posted 2008-11-24 Email Print this article Print
 
 
 
 
 
 
 

HP's broad businesses, which include services, software, printers and ink supplies, has made it less vulnerable to the economic downturn than rival PC maker Dell. HP posted a 21 percent rise in quarterly sales of laptops, and doubling in revenue from services from the EDS acquisition earlier this year.

TO INCREASE PRINTING SUPPLIES PRICES

HP said software revenue rose 13 percent to $855 million, while revenue from its enterprise storage and server division fell 1 percent to $5.1 billion. Revenue from its imaging and printing group fell 1 percent to $7.5 billion.

Hurd said HP planned to again increase prices on printing supplies in the first quarter due to exchange rate pressure from the Japanese yen.

"It's a cost pass-through more than anything. In this environment it's probably one of the few areas you can actually raise prices but you have to be careful," said Shannon Cross, of Cross Research.

HP posted a 21 percent increase in sales of notebook PCs, but desktop PC revenue fell 2 percent.

Asked how he would reconcile HP's view to Intel Corp's (INTC.O: Quote, Profile, Research, Stock Buzz) more negative outlook on PCs, Hurd said: "We saw some things that, to be blunt, were just different in our numbers."

He said he did not know the details of Intel, which had shocked markets earlier this month with a revenue warning.

Ashok Kumar, an analyst with Collins Stewart, thought HP's guidance was too optimistic about sales of equipment.

"If life cycles get extended from three years to four years that will have a dramatic effect on revenue performance and HP cannot sidestep it," he said.

HP shares, which gained 3 percent on the New York Stock Exchange earlier on Monday, ticked 1 percent lower to $35.30 in after-hours trading. The stock had lost about one-third of its value from September to mid-November, before gaining about 20 percent since the strong preliminary results.

The company stood by its forecast for first-quarter earnings of 93 to 95 cents per share excluding items, on revenue of $32 billion to $32.5 billion. It also confirmed its forecast for fiscal 2009 earnings of $3.88 to $4.03 per share excluding items, on revenue of $127.5 billion to $130 billion.

(Writing by Tiffany Wu; editing by Richard Chang)



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