HP slips on disappointing sales, outlook for ink supplies

HP signage stands on display outside the company’s headquarters in Palo Alto, California. (Bloomberg pic)

SAN FRANCISCO: HP’s shares declined as much as 13% after the company warned that sales for its high-margin printer supplies business would fall for the rest of the year, presenting a setback for its effort to boost profitability.

HP printer supplies revenue will decline 3% for the rest of 2019, driven by weaker demand in Europe, the Middle East and Africa, executives said Wednesday during a conference call with analysts.

Earlier, the world’s second-largest personal computer maker reported sales of US$14.7 billion in the holiday quarter, missing Wall Street’s projection of US$14.9 billion because of component shortages.

Ink supplies provide about twice the revenue of actual printer sales for HP, and help fuel the printing division’s 16% profit margin.

Demand fell due to pricing and more sales on the internet, where HP has lower market share than in stores, executives said.