HPQ - Earnings call transcript Q3 2019

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Operator

Good day, everyone, and welcome to the Third Quarter 2019 HP Incorporated Earnings Conference Call. My name is Shaun and I will be your conference moderator for today’s call. At this time, all participants will be in a listen-only mode.

We will be facilitating a question-and-answer session towards the end of the conference. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.

to Investor call Relations. like Howe, to now of Head would turn over the Beth I Please ahead. go

Beth Howe

Good Printing. afternoon. to Officer; Chief I conference Chief Relations President the for Executive am HP's XXXX and call Beth Howe, Inc., fiscal Imaging Steve HP’s of I Enrique Head with and Officer; Dion Lores, would President quarter and Financial like third welcome Weisler, to HP you and earnings of and Investor HP’s Fieler,

let Dion, the me you handing at webpage made on the one to Before posted earnings webcast. after of over call investor.hp.com. year. this replay available shortly the presentation being our approximately release webcast remind Investor is call website call that be for and Relations the We slide on the A our will accompanying

always, presentation of best see of forward-looking the based as are and this them view and we on our businesses our world today. elements As are

please forward-looking earnings information, the see in involve detailed assumptions. and that more uncertainties statements For disclaimers to relating materials risks,

For and and HP’s update assumptions, these our XX-Q. please risks, not and HP forward-looking obligation to such a does statements. uncertainties assumes most Form intend to reports, including no SEC of any refer of discussion Form recent XX-K some

XX, HP’s also in the Form We this amounts XX-Q differ and could the the information other XXXX discussed available and HP’s reported call information for estimates quarter on that note financial reflects now on SEC the July ended based materially ultimately filings. fiscal from

all the year-ago corresponding specifically this During for webcast, period. otherwise comparisons are comparisons noted, year-over-year unless

accompanying earnings Please and to reconciliations. expressed included refer release the information. for on GAAP For a today’s financial those presentation non-GAAP reconciliations been tables information to slide the we’ve that comparable has basis,

to Dion. turn I’ll now And it over

Dion Weisler

and Beth. for thank Thanks, us. afternoon joining Good you

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Enrique Lores

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Dion Weisler

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to quarter. turn the me let Now

raised to and generated of returning and flow operating repurchases while per We again currency. was full-year non-GAAP up in revenue foundation guidance. we place, in in of share billion, XX% display we've have which million up cash QX. and solid EPS And our free in dividends. Non-GAAP stock of midpoint X% shareholders of the also delivered billion, almost We form a on financial constant $X.XX, earnings once of the $X.X $XX.X $XXX

that strong key including uncertainties. also opportunities be consistent our macro and global positive our demonstrates continues results to shaped executing to focus performance reflect These challenges compete leadership HP's and successfully and geopolitical ability on strategy Our foundation in by marketplace and a in the markets.

actions team to are taking you're Enrique and still in the going of early see and days We their on relatively to the progress. HP's reinvention, build

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new products, continued to We and services priorities, invest key solutions. in also including

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product's forward-looking play driving demand our go-to-market we're industry that's live chain people and work, ongoing systems, dynamics. personal Across capture the an supply aggressive reinventing well are agenda and navigate and way positioned to and

contractual includes QX. in print, to technology increasingly making XX% was a continue with revenue capture services. outperformed focus We We which continues innovative in by and environment. the down progress calendar X% AX share products and supplies. In achieved an market, once print opportunities in market. differentiated challenging category driven market market lead again to to IP the we and are sharp the AX, the our Turning leveraging HP on

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outlined our Turning a contractual Strategically, progress particularly progress, to remains we’re We’ve we’re initiatives growing calls. adapting making category earnings relative our we in been models. the in EMEA. supplies prior on work and addressing and Supplies. and business businesses strategic aggressively operational to This

continue ecosystem. inventory the systems, channel improvements in management to Tier our and X lower Tier EMEA other our make made among in partnerships actions monitored X strengthen improve and business and our pricing we’ve discipline, levels Operationally, channel

We direction are there's are the We in to also and EMEA. right senior steps changes making still all in do. important leadership believe work more these

impact of the extent immediacy the the changes fiscal both terms in having half and that acknowledge the EMEA's 'XX. impact on results of short-term We these a in are of second

where EMEA saw QX significant revenue in In macroeconomic the softness. signs contributed prior addition, we This seeing are market below we particularly our industry-wide being revenue also increasing softness, of declines and most expectations. to supplies

the operationally focused do right to and but are business, doing need for the we We structurally on more. things

We are a in cost making significant and with changes market demonstrating the leadership dynamic scale environment. to navigate structure our

to XD printing our Turning business.

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for annual as communities. business, report and planet in impact are documenting so do our making. just right the the sustainable In we needs QX, serve ways do. Lastly, to business. our of They’re to grow right are do things we continue the things our to we published people, the These not we progress that our

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more Let over Steve now the me quarter's pass financial this call to insight for results. into

Steve Fieler

Dion. Thanks,

partnership your for forward. And you I I forward thank dial my to appreciate you I you Before and HP. just so Enrique been won't already transition change. your through I my going removing a go yet. in want the won't speed be has leadership that a know for seamless to of I on time, our results, just long speed from dial look partnership that

third HP's ability EPS our manage deliver we effectively Our and strong company non-GAAP dollars, In and quarter growth. reinforces to QX, grow grew flow operating profitably performance profit double-digit broad-based consistent results, generated delivered portfolio. cash

Our short-term successfully in invest strong while when This helps ability the the demonstrates our of delivering up pursuing remained financial them. deliver in generate based set creation. to business financial to quarter value ahead results. we’ve returns performance long-term on this We challenges us, opportunities our focused also addressing and while company

or the currency, X.X and and personal in up year-on-year, details at driven the grew APJ disciplined look systems. execution, revenue by Gross flat flat rate were in margin Regionally, of was in constant third XX.X%, XX%. $XX.X points was percentage Net year-on-year EMEA improved up currency. constant and Americas X% quarter. Let's billion

non-GAAP Non-GAAP X% was driven in growth billion, for net the shares. operating and a digital in $X.X infrastructure. or expense approximately innovation, quarter. of investments both billion share $X.XX, diluted expenses by $X.XX million share investments HP's targeted net well were earnings per of marketing We up investments as X.X delivered diluted OI&E as including XX% Non-GAAP spend up increased efficiency, count $XX for with

part as million, net income settlements This a with non-operating by Non-GAAP recorded by of per well million gains adjustment. tax Agreement. amortization acquisition of of tax assets is of retirement the million of OI&E, share other related restructuring as gain million, Tax credits $XXX million. tax an driven across jurisdictions. excludes Partially for Enterprise and Hewlett-Packard gain related tax primarily charges several of net is diluted also the indemnification net offset which resulting net excludes $XX $XX credits earnings $XX gains various intangible these It the from of Matters associated $XX

QX result, was per a earnings GAAP share diluted net As $X.XX.

results. performance At By are XX% our the Personal saw with we third X% in once Systems, Revenue we or segment billion, constant in divergence in with X% $X.X XX%. up consumer commercial currency. and was the customer in again level, pleased segment, up revenue down very quarter revenue

By successfully consumer notebooks. was while commercial markets. our X% demand overall product The of and desktops, X% flat product for for category, some team continued up to as strong, revenue navigating up for softer manage workstations mix the remains

our mainly QX execution large The $XXX were prior was million million, strong Operating commodity operating the up at margins environment. teams profit X.X%, X.X favorable up focus in very year. points year-on-year. exceptionally and disciplined increase from on by $XXX the a was continuous strategy cost driven

said, the a our being print, revenue, share offerings. market We That business outperformed the hardware progress In were our to results in difficult and increased more market. grew make continue commercial mixed. contractual

to points down supplies operating XX.X% lower were due margins revenue. X.X However, to

in revenue and commercial were down Total Looking XX%. HP X% units consumer up nominally consumer and the X% revenue market market hardware to X% currency. QX was was declined. as total XX%.In units hardware details, down calendar revenue with print at constant down gained overall down hardware X% share billion, was XX% $X.X and the units QX, down Commercial

supplies reduced remained X down quarter was in constant levels the below X% currency inventory Third ceilings. with revenue EMEA Tier channel billion, mid-teens. the in down $X.X

plans quarters right strategic remain the described and we operational and are taking confident the on progress making are We in prior actions.

to for decline on expect However, and QX weak the in X% to revenue market, we fiscal full year. EMEA as thus, expect softness our in plans, we with supplies supplies approximately continue X% progress increasing to to the make we the revenue remain

the cost making out also for shifts of to 'XX. financial expect strategic to and while that business, across business and take we forward, in operational, our grow in more of hardware services significantly factors not these FY planning are combination we combined The model supplies our means supplies pools. more market Looking profit revenue

will we growing that we Investor us FY next our in at that, in said having 'XX. non-GAAP confidence EPS the Importantly, multiple levers Update, give share have

$X.X QX Turning conversion strong to and XX days. respectively. operations cash free the minus capital cash In QX, flow $X.X cycle very at flow and cash allocation. was and billion were cash from with flow increase a cycle days a with and conversion days decrease X improved of inventory. seasonality outstanding X-day days line X-day cash a normal in payable increase Sequentially, billion, outstanding, in days sales in in X-day

cash $XXX returned Year-to-date, We and $XXX flow dividends share via million to repurchases shareholders of XX% through shareholders. cash free QX. million returned we’ve in to

mind in QX, to to forward following our the overall keep financial Looking related outlook.

expect expect we remain the continue We fourth a be to in In soft market to to competitive, pricing headwind environment Personal expect quarter. Print, the we currency. Systems, from and in the

addition, is projection long-term non-GAAP to expect our based continue we 'XX. be financial on to XX% which for full-year, rate FY the non-GAAP In tax in our

are be these diluted of following considerations to to net QX $X.XX we QX 'XX providing earnings in the the $X.XX. 'XX per into range in be earnings range net $X.XX Taking non-GAAP per share diluted outlook, to GAAP account, share of to $X.XX. the

our diluted and earnings $X.XX We full to in approximately share be earnings through the net full-year of per fiscal to of continue $X.XX a are And share to raising dividends XXXX cash full-year share repurchases be to 'XX to GAAP and to to shareholders free fiscal in diluted combination of the range range expect fiscal $X.XX non-GAAP return XX% we per flow the year. course of of $X.XX. the net over

Operator, call the let's open for questions.

Operator

Our Morgan come question Stanley. Please first from will Thank with go Huberty [Operator ahead. Instructions] Katy you.

Katy Huberty

as you go, sorry and afternoon. to you family. wishes you both Good Dion, you. Thank for see I've your watching enjoyed but CEO, best really succeed

down third is the guidance In terms penny fourth fiscal of of fiscal midpoint quarter. a questions, quarter EPS the versus

the headwinds some the just that this I two then And the worst the have years, quarter. fourth seasonality talk look are EPS of Can If you follow-up. incremental you driving expanded in a past at year? about

Steve Fieler

prudent the a just touch EPS, current I Personal of increased outlook for as Systems we Sure. describe we're opportunities. steadily risks and little Katy. the Print. our all QX, did We've in our I balancing strength will will of we view remain you full-year been that delivering on and on our one, I QX. know take Maybe the on and what year and outlook bit would thinking

across Personal Systems, will constrained have So a CPU environment for products. I still certain

existing we're QX in of and not competitive We in that on importantly tariffs supply with and as notebooks for dynamic a had expecting the we are guidance, But pricing the assuming environment costs QX the China incremental of happen QX. to according record. do chain enter into the plan softening benefits some we

some out So by supply headwind to had expecting in seeing from that we are the in chain tailwind cost FX print steady offset Print, In of perspective soft. essence the overall in be market will the QX. we've a

units We of will said, operating to assuming continue to we tariffs be on could That an profit issue raised look could units, less for impact being units. expect which impacted, do the could, I mean, opportunities and dollars. the that are we've impacted, but place prices

closer to expect but QX, supplies drive overall in we expecting do are We to results our QX decline expense management.

So of prudent to within it's $X.XX. I deliver with when the account, $X.XX range a confidence of we that guide, all into take sort can

Katy Huberty

you about X% Printer drawdown some was mentioned supplies perform of EMEA. for as the in in you how inventory Thank down you headwinds. did that. But talked than the macro worse you expected,

you the is fourth to growth drawdown year. and branded into share Do suggested Canon market that over depletion in Your in the to is much come quarter? share view, inventory improve the back left the investment supplies or how and half model still that the drive partner can of now

Steve Fieler

visibility address additional the inventory then So start our a given of channel overall the will the some ecosystem. I lack I color. I is to some with previously, point But will and data of your said entire into Katy, triangulation, the of sizing provide

of EMEA, Tier we estimated. and reduction the since dollars have that QX, dollar is $XXX we the channel down in is we X visibility. where both that million brought this X the channel nearly So we Tier initially inventory so The total parts our inventory monitor,

progress. we’ve made good So

of the to possible unmonitored made downstream what not in quantify specifically impact we've ecosystem. it's the However, rest

operational that time it the important do, addition, is are, maintain reducing know In we've to under an business do versus to distinguish our inventory at ceilings It market monitoring discipline. we're dollars It's been which of we continue does the right the we more thing make channel Tier inventory the important also we X market improving X. our to factors. difficult EMEA is reduced the factors softening, globally, that same and which the Tier channel

Operator

ahead. Our next will come Cross Research. go Shannon with Cross question Please from

Shannon Cross

to Thank much. we question family. your comments. the printing want enjoyed be we around, in out they've if Katie's more curious just shift. -- how but And I prior on relative quarter Dion, a is We've to don't most working with hear not know to would you what's I secular mean, going a you understand to some in but first that and be just more I of of a their the recent if others. for this Canon want much very hope is still lot Japanese My as and reported echo I to commentary, for to best Enrique of started bit seems about concern we the can

you macro pressures? have if again I'm here it's there's then curious Thank a changing the or I really And So think follow-up. if more something you.

Enrique Lores

the thank Shannon, for question. So, you

give talk overall supplies I Let of view market. you will first then me an the print about and

strategic. been highlighting. we the discussed be strategic issues some our think this On impacting are some the to years we us and also a be come not two also it will will only of -- competitors operational, this has of as -- but though term QX, have in year, have that and space, impact The are supplies some to are see we we issues, different going type longer

supplies to profit that see a capture and without to overall installed created are try attack having and attractive our in have reduction it that, necessary it During an to last the have now pool means pool we create base. that of share many we profit year, other because attracted And has portion of the to a erosion in significant a a that a companies very of model hardware of according to reduction price. a investment

are slowdown an and last economic the this competitors And in is having economy our also many similar -- of in the dynamics. We the experiencing quarter, that seen slowdown. we’ve an top impact, experienced consumer that, On seen especially during of have other we’ve in side. a

when companies at last all of I many understand, the the you comments in we other many industry have of So look the the the combination described, factors that can of been the quarter. making during

Shannon Cross

that that will where that thoughts pressure impact areas XX you. probably for want and not Win some I you you're take I'm run How XD pressures your top Thank fact to next But you. PCs Thank under the in facing other that maybe, and looking the go investment be to of but And and some the question, the year, does don't of line any the Will is as you're refresh. going? as if market? curious and are printing of AX at like to the spend know Analyst say the follow-up to going at look shift on Win end Day. X that my the know you following I'm I company what going -- is the trying at of front life

Steve Fieler

in to both. you do Dion, innovation Rick, then also and as about first that we investments, I It's and the to the address see maybe continue heard efficiency. And bit but mean chime do will our context and as that prepared to annual want P&L, to maintaining you myself, think reality we've productivity of give in. opportunity so Enrique Shannon, a over expect business, that billion got if both investments out from remarks of you spend. and is cost little just our an to we while think of growth. take our all I $XX you there's in significant I for

a cost So opportunity of got spend in addressable after to goods rather we've across large OpEx. go

So matters. point really really every percentage here

But Investor ahead sort investing more months our we growth at align so Day. in you with will the And see the cost be the can about overall, activities in we hearing our activities. of opportunities

Enrique Lores

see that will be plan you different three Shannon going directions. complementary think around is to aligned forward going I our

the grow. last business that some First, we for we year and expand to Day space. already we’ve into third, to -- opportunity growth customers cost need and continue growth we need down get a to during continue and capacity opportunities our structure the close double opportunities to the At reduction opportunity to model. our that the great at to also customers And continue also evolving closer had all will structure, we’ve share this of this value businesses getting XD simplify give are in all in continuing contractual by of the to create identified Investor I to company, invest the to reduce cost in and the the us because in highlighted the area. some to our to will same printing, time, progress us past, plans that we

Dion Weisler

we I EPS again these gives ability in grow get just us, confidence of the to year. confidence us To all Enrique that out, multiple of Steve gives myself, that that finally round our and and see that will what say to next that's levers

Operator

from will go question next with Toni Please ahead. Bernstein. Our Sacconaghi come

Toni Sacconaghi

on wish you I to with more Yes, family your forward I comments. reiterate previous follow-up just thank and working the you and the all let and for Dion, going wanted to you printing. Enrique me closely. best forward look

were So thought, worse second which to actually little course have worse the a originally X% of the things to over you the have is you through X% couple get the dramatically noted initially months to you suggests through it's which of in year be down and the X%, is last half better tracking your and guidance was it first going might that supplies be X%, to like down sounds be of going X% now gotten because that half things as improvement, I notably the you're or progressively tactical and you think down thought year. suggesting than had

thought, bigger so on are reflect alternatives headwind strategic most change that the is you suggesting you economy driver healthy. and weakness economic my and of principal or the be a the observation still had is pretty I Europe outlook, is really just suggesting magnitude of because, that originally And globally that I than cloning the you guess, this in are from if would

is if supplies X% so minus seeing that's with healthy economy me. pretty relatively And rough X%, normalized or we're growth minus to global

you perhaps a clarify follow-up, that I and please. So have could

Steve Fieler

financial I hand additional for So, context to Dion over color. provide some think maybe and

the down and EMEA revenue in performance say EMEA. our down was total with that period, X% because So be to continues EMEA that mid-teens. X%, X% then down roughly half, down to clear by first same in want our I supplies in supplies the very be driven was total supplies was I QX,

Dion Weisler

Yes, factors Toni here here. a add There's primary simultaneously. bit that let context are occurring of me two

is, outlined our about prior the discipline systems protection past, few. that And as particularly we operational look we seeing appropriate my more in name as as in our are calls marketing EMEA, making progress one environment, industry-wide plans earnings the pricing management brand prepared remarks, the and on even in uncertainty well including a market the are we've we're deal and in I to secondly, softness. across first The we macroeconomic in the taking structural as described talked our actions, business and just

size the that two changes create half to of of stronger we we're year these put addition, of reaction on senior in short-term had a the that impact print EMEA And the the combination underestimated these of management business and the all EMEA, and In designed it's would expected are while factors these the the impact back have the and in free we EPS challenges decline of changes on making see we're our of channel, of But the that in immediacy footing. we through remarks, hit flow. cash year. finally, next as navigate in grow are we multiple our confidence our in senior anticipated ability and his spite the in of confident to can EPS metrics us larger we all levers And again in Steve gives that confident that again and and mentioned this, prepared than EMEA. these

Toni Sacconaghi

for you that. Thank

Just topics. to change

I competitive more description QX was X% strong your sounded that quarter. you And PC how as noted quickly But then environment PC that you a sort your think What X%. be normalized of you will exceptionally think be the customers? passed we along do PC component were margins margins strong. point As about the to how Steve guidance at margins? for that X% not said like do had this may and normalized prices following do that suggesting in to is it lowered one ultimately X% feel to think and to end you of

Steve Fieler

we million profit address question, to all performance directly your margins to the say exceptional kudos growing $XXX So to remained personal we been us million view with on to profit do remained $XXX at do and want I as candidly in the that I quarter They've drop Toni. year-to-date stuck to team that disciplined, X% year QX strategy. do an of over and alone X.X% this X% systems of alone. op with back, give segment dollars range, would margins expect But operating into disciplined they've normalize for the

of dynamics be over Our goal is mix always pricing across time. to the end on shorter-term tailwinds shift that years and higher of costs, tend and rapidly. of focused longer-term other of move improvement approaching that commodity our goal our the of we over higher stickier that it There improvement and whether and pretty a headwinds to expect will What be products our X% FX, to we're more to the more end this the time, getting over is ahead. portfolio again, margin structural X% that get the services, of with

Dion Weisler

you've Toni, us seen strategy multiple from consistently in the that the what over very future. that's deliver can expect think, I you years and And team against

Operator

question next Amit with ahead. will Please come Our go Daryanani Evercore. from

Amit Daryanani

questions to in my wishes guess future. I And and your the me best for question taking well. Thanks you family Dion guys. two lot from a as

supplies the conviction how as on Given the and spread Dion so versus I these there think or confidence split what far execution why those well? discussion you hear is shortfall of getting your Enrique, had way days ago, the two beyond love macro buckets you thought up? worse we've or issue. to And guys a XX EMEA Is North America to issues much not APJ would to then versus

Steve Fieler

taking what's profit hardware that that it, the -- to given in we're QX, the in Dion two levers cost address the on Print bifurcate profitability actions actions larger of two between first we more data really print the items well the of as grew dollars our services, in sort part our growth it's hard items in in described decline. how to acknowledge, multiple year down is, we the supplies and our supplies reflect our I growth as do from changed. market print. that's if X% structure half the have business dollars more will But of the operating and were in just important I want period. in to you first across And the initiatives to in I not highlight, What do think highlight So we in it's op did grow Print,

other So there beyond levers supplies. are

Dion Weisler

we out Yes, make I and the I as thoughts. to in I in will his chime I'll plans us continue here also that give on in ask discussed to progress Enrique QX, laid But action February.

steps put is to in Our decisive and taking the macro shape that appropriate business seeing. the supplies in industry-wide headwinds in task our force supplies of really EMEA we're fighting and light better very

something an as expected and timing a We you back of give there this size color from of ripples of I'm half well. these sort actions we the year caused the the that of more in progress on can sure the underestimated, is and little Enrique impact our

Enrique Lores

Okay.

as both operational we made, side. had in because first operational the me the that [indiscernible] a strategic outlined the improvements cover let of an we’ve So nature QX, some of and

side, in We increase needed demand said generation the to outlined of share we some areas investment operational our we On the that of in them. let four online so side. progress, me

we that done have the We seeing progress. and are

improvement key at the Google. market, for of in European for most in coverage our we’ve example, supplies customers in XX seen For look -- when point

we’ve We been have in also by you of own our IP. very the where ourselves. the also decisive on fight kind is have double And protecting portfolio IP of down who taking in our but our those efforts our protecting IP. side to done brand both something protection activities counterfeit, But that increasing they actions in the

increased visibility partners said to in And reporting We have Tier improved in the Dion we our also have have number we and business just as QX, the have of continued that by we Europe in space, XX%. X the management improve systems. also

and over -- decisions controls We effectively. have sure policy we’ve business our around to centralized and our improve that make changed discount again pricing more the we the manage

broad we all see, can the the full of had until role effect very and time you those. it of As this some and action is see will take deep --

Operator

Please Baruah will with Our Capital. Ananda come next ahead. go question Loop from

Ananda Baruah

did Good really will Hi. questions same all for and I family wish the in you with been future. the job call. company. And It's taking the fantastic Thanks the afternoon. the you great your you as Dion the thought again echo a just with on everybody and working best

get sounds would many guys how of guidance we of good it here. you I up sense of if I guidance we supplies be And I with I sense And Europe at months -- many helpful quarters you mass? have when some some yes, critical if on Two dynamics sort what's a then critical going we channel on but PCs, since then give like It structural think you've the getting sense long to maybe how have would the kind of one you luck. you're guess could. I just Analyst it, are follow-up. So, could your giving Day, in are with structural adjusted some and have the then any call to take. guess of going sticking of, mass how

Steve Fieler

will detail take and prepared one a and and operational things. I I I maybe long said in first. as strategic the into remarks, that think And 'XX my Enrique FY So about went

bifurcate So I the would two.

timing sort on than immediacy extent to good progress. to operational quarters driving to the order And the relatively would in impact expect are operational short good making we in making of higher and the But So of come. EMEA, we we're through the anticipated. changes side, a was what are the we in work these yes, progress the in

that's impact multiple being of the for us. grow said, more levers. in we As it And 'XX. it we a previously, is impact to have primary as the why driver FY relates I commented supplies really don't sustainable to expect That strategic more

on of hardware in cost through contractual. we're supplies profit our this ability demonstrated of The in have that Dion, got in opportunities. the And got business significant Enrique, And levers year around shift itself. driving. half a things the leadership We confidence plan services around is dollars our itself. and as to declining. first levers all growth around initiatives The operating shift grow and EPS year. our next been myself leverage even business to grow. this We the the the with got confident growing we're year plans why holistically these model to We've we cost team. and profit have for the EPS to working next structure saving We've and we our team more

Enrique Lores

a have as strategic The business our there. on business by are addressing changes. a acceleration I will little model of critical problem we supply to be The is answer. side printing the service

a these be many we side. Laser we leading the at with seen different of business us And introducing printing have Ink will now structure. markets, model, actually our and looking You both in also and on side the are cost

was the Steve we sure on that to structure cost continue mentioning our will to reduce EPS We deliver goals, that make before.

Steve Fieler

lining We at out these look the you with forward to Meeting. Investor plans all

Ananda Baruah

year is guys, to fiscal in And growth it quarter return 'XX? possible to any at

Steve Fieler

was particular on assuming question want I'm and to specifically that relation And supplies. we don't to get in think I comment quarter. any

QX. our looking profit Again, want personal we share strong ability a have business highlight I company to holistically in operating that drive also our we're think XX% earnings do about flow. portfolio to per systems results cash and represented at the of both I

company to we So levers earnings our our multiple per grow share. have at

Operator

Tim Barclays. Please question go next come will from ahead. with Our Long

Tim Long

Thank you. Yes, I just if could. two

quarters. side, comes just on seeing to what supplies side, going it AX few us First, systems that give you scale into personal getting a to then take model? there. the you to to us get tough When What last financial consumer some the And could color segment it's the going does will on Thank and when that little Could gain more that you second insight been you does mean? again? the scale little you. just some pull give mentioned What through? has XX% we scale getting a start

Steve Fieler

a similar we did company our when actually systems look to we softer results, and our at we so consumer stronger what Yes, see quarter a commercial. and last personal results, saw

are we results at when a softer commercial. consumer seeing we the look the with across board stronger think I

driven industrial across It's appropriate. on portfolio is that we important getting we're it SMB of Some supply shaping a of sell systems the supply commercial diversified that consumer you availability enterprise the and even we've to the space. very all is demand side as by got and understand and commercial personal and

we the feel up portfolio in of the we geographies segments we that and through we play customer that like have we and plan, down manage the product diversity given and environment. So can

Dion Weisler

many doing our QX also We But strategy and has double-digit mass achieved Xerox strength know don't our XXXX. strategy. critical and in a we've XX% key focus They It's been at validate technology fact, field printing along announced said our Yes about on our share difference. and of and on don't with always and overall a how expanded share second been that of competitive we target AX, even all context the that in end strategic AX in of their which this the said the that. the and contractual in we about and OEM further $XX market after think that that by AX just think we plus we validates realize of as the business relates and XX% AX billion or element it many building in we solutions, a will I very overall we're achieve them that question, important printing their that systematic said to go also portfolio. customers a product market. occasions partnership is I've of earlier be

I'm is any we that share the period, distribution by really I'm and contractual to penetrate particular won't. not saying on So office. and what build or to But fixated we important not we will right is partners getting the XX%

you what customers' combine is with portfolio. our What overall our overall AX presence, printing our compelling us. leading And we formidable can when technology, AX the what very market which is that channel from the a our most. and then guides is say couple really and So solution have and perspective I matters capabilities products, our

larger remember into solutions. to our strategy services more our and is model and business evolve to So in contractual grow

Operator

question Ong next will ahead. come Our with Deutsche Please go from Jeriel Bank.

Jeriel Ong

guys. for ask the Hi, me question. letting Thanks

a So couple print have point at degraded in margins kind to least lowest years. of of the

what a stabilize? think there even -- other to if on would printing focusing and get I be asking businesses print the margins different supplies is maintain way, perhaps to margins drivers where revenue scenario decline the a in growth

Steve Fieler

it's dollars. been. communicate think that op focus any important I we It's particular our always has to It and quarter. related profit operating dollars is not on

earlier, As I different have just profit we to alluded not dollars. levers to supplies drive more

our margins focus op probably through would in of QX, of challenges remain rate XX%. I on the expect in our drive QX range of earlier least profit the deliver a as in opportunities at supplies and about more at dollars our in overall print op annual to the near-term, supplies my below given we is margin even at XX%. being market it reiterate As did least But today. with we talked I our margins to work it remains be specifically, XX.X% and That to to EMEA more commentary op QX outside supplies relates is target weakness. items said, operating dollars the the margins weaker target

Dion Weisler

our really of free share we add make. continue that per metrics And how cash consistently of and we're at we flow. commitments to against total company proud look earnings will senior the manage The additionally we I level, portfolio deliver our that and

challenges a comfort operate experienced to I team this the business. positively how and of just that to and draw up inevitable respond should how highly you knows think to in this great down from part business markets and both are

Jeriel Ong

but quarter-on-quarter I basis side. margins. I it. the I one, There's XXX improvement point appreciate flip Got that. will over another in about PC to got

quarter. was that how margins It that thought is seeing increase components. us? due better your any latest better of I consumer. the some from mix breaking quarter you prices the PC while you to versus any memory predominantly versus memory perhaps earlier there their guys can like -- seen seems to it peers in a sorry. commercial in probably for way might consumer better much is way about you're due in have So margins business seems mix more of guess better break quarter-on-quarter more And from components I'm down have down this versus or like

Steve Fieler

but over we time going very margin above. year-over-year to plans it say upper on to disciplined of systems strategy, don't I The all basis mean the I are to would our has with break personal also continues target but X% to to our specifically, rate Toni, make it's to X%, I I Well, our between pricing down question, it improve. been drive -- team the mix continue overall progress. a our end believe, from and operating I'm the to think earlier are that is rate. of is

Dion Weisler

your and honor against thank to So unfortunately, you cost this all team's of joining for a want our do have business and investing the We in taking always I It's We a also you. out today. today. while this business. innovation, Four we we doubted and reinvigorated simultaneously -- are been didn't of thank people both. strategy you of reinvented with to the obviously personal over talk working an years everyone I time many for and executing years. lot wishes we support us ago, The have to for to business and extend to out about your personal HP. want warm

or that. non-GAAP As that out free met to we've flow the batting need continue of our consistent for average. exceeded last XX cash like you EPS XX delivered a and result, outlook I quarters. Enrique

strong foundation, portfolio. strong really a have a We powerful foundation,

have and this a reinvented Enrique and we've me optimistic serve been company. be of more performance. a that iconic guide to his future the culture of forward. to focused of to as We for you been leadership. Thank look a talent, I It's and then love honor an smooth have as to world on the for him moving out partner under has very couldn't class year fiscal forward company and a Director HP much. transition and as continue I company at we CEO the finishing and to the HP I'm ensuring tremendous excited to XXX% QX

Operator

now and you The now presentation Thank concluded. has may conference attending today’s for disconnect. you

HP (HPQ) 22 Aug 192019 Q3 Earnings call transcript