HP Inc plunges after printer business underwhelms
By Anya George Tharakan and Sai Sachin R
(Reuters) - Shares of HP Inc, which houses former Hewlett-Packard Co's legacy hardware business, plunged 16.3 percent on Wednesday after the company's lackluster results fueled concerns about its ability to weather a slowdown in the printer and PC markets.
HP Inc's revenue from both its printer and PC businesses fell 14 percent each in the fourth quarter, their worst performance in the year ended Oct. 31, and forecast current-quarter profit below market expectations.
"Things got worse. Not only did they not get better - they got worse," said Shebly Seyrafi, an analyst at FBN Securities.
HP Inc Chief Executive Dion Weisler called the printing business a "much greater challenge" than the PC business.
The company has been cutting printer prices to tackle stiff competition, particularly from Japanese printer makers Canon and Epson.
However, the price cuts, coupled with the effect of a stronger dollar, have reduced the value of income from overseas markets.
"The unintended result is that we are not getting the yield per unit we would have expected," Weisler said.
Revenue from HP Inc's printer supplies such as ink cartridges and laser toner fell 10 percent this quarter. Supplies account for most of the profits for HP Inc. Continued...