HP Inc. CEO Dion Weisler announced that he will step down effective Nov. 1 because of a family health matter. Weisler’s successor will be Enrique Lores, a 30-year HP veteran who is president of the imaging, printing and solutions business.

“Serving as CEO of HP is the highlight of my career, and I want to thank the entire HP team for the support they have shown me. I’m incredibly proud of what we have achieved and equally confident in where we are heading as a company,” Weisler said in prepared remarks. “Enrique has been a tremendous partner whose leadership has been instrumental in setting this company up for success and delivering on our strategy. He is one of the smartest people I know, and I have great confidence in his ability to lead and inspire the next chapter of HP’s transformation and growth.” 

HP also announced better-than-expected earnings for its fiscal third quarter ended July 31, with strength in its PC business roughly offsetting continued weakness in printing, particularly in ink and toner. HP has been struggling this year with softening “consumables” sales in the Europe, Middle East and Africa, or EMEA, market, and the quarterly results suggest the program to fix the issue has a long way to go. 

For the quarter, HP reported revenue of $14.6 billion, in line with Wall Street estimates, with non-GAAP profit of 58 cents a share, ahead of HP’s previous guidance of 53 to 56 cents.

The company reported 3.1% revenue growth in its Personal Systems business, including gains of 8% in desktops and 4% in workstations, with notebooks flat. That was offset by a 5.3% revenue drop in printing, including a 10% drop in consumer hardware, a 3% increase in commercial hardware, and a 7% decline in supplies. HP shares were down 6.2% in after hours trading on Thursday August 22nd. 

Weisler said that the company is pressing ahead on multiple fronts to address the EMEA supplies issue, including changing marketing strategy, a renewed focus on brand protection, and some senior management changes in the EMEA business, among other steps. 

He said the company underestimated the impact of all of the changes in the sales channel for supplies. “It is causing a big ripple,” he said. “It will take some time for the channel to adjust to all the actions we took.” 

The HP executive also noted that the company is seeing some enterprise-market softness, reflecting continuing trade tensions with China; exchange rate volatility, “which remains a headwind;” and “deterioration in EMEA.” He also notes that HP has seen some deceleration of growth in China, offset by strength in some other markets, in particular Japan.

A few weeks after Weisler’s announcement, HP also announced the immediate removal EMEA president Nick Lazaridis. “Nick Lazaridis will leave HP immediately,” HP stated in a memo, adding that he had been an “important leader in EMEA and we are grateful for his support and contribution. Replacing Nick is Helena Herrero, MD for HP Iberia, who will serve as interim president for HP EMEA.” 

On the impact of tariffs, Weisler said the company is taking steps to diversify its supply chain, in particular for notebooks, to reduce exposure. He also said HP is likely to raise prices on some products when tariffs on printers go into effect on Sept. 1. He said the impact of tariffs was reflected in the company’s full year guidance.

HP sees current-quarter profit of 55 cents to 59 cents a share, at the midpoint a penny shy of current Street consensus of 58 cents. For the 2019 fiscal year ending in October, the company now expects non-GAAP profit of $2.18 to $2.22 a share, up from a previous range of $2.14 to $2.21 a share.

Source: Barrons

Source: The Register