Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| And in fact, the countries where the market program has been more successful are the countries where we have been able to get more support from the channel, and it's a win-win for both sides |
| Our expectation is to grow the revenue of the company between 2%, 4%, operating profit to grow faster, EPS to grow faster than that even by capital allocation and to maintain what we consider an investor-friendly capital allocation approach, returning 100% of free cash flow with the caveats that we have discussed before |
| The combination of operational discipline that we have but also the opportunity that we see in the market to drive innovation, to really integrate AI into our portfolio to create better experiences for customers, makes we -- our plan very exciting |
| We have also made good progress with technology and innovation, improving our share of supplies, both in ink and in toner over the last few years |
| And also, the growth that we expect to see on the big tank side will help us to drive to grow our share and to recover some of the share that we have lost in the modeling side of the segment |
| Subscriptions are good because make the business much more predictable |
| We have also grown our share and expanded our portfolio in big tank that especially for emerging markets has proven to be a very important way to improve the overall systems profitability of the business |
| We understand what customers are doing, which gives us a strong ability to expand just by having this direct contact with consumers |
| And this has really helped us to maintain or to improve our margins |
| And this reflects the ability or the focus we have put on cost structure and improve our cost structure especially on the margin side, on the cost side, we think -- and we have done a good job, and we continue to see opportunities there |
| And clearly, by having the ability to connect PCs and video conferencing systems to use the same audio system, same video systems, we really have a strong position that we're going to drive both on the Poly side, but also on the HP side |
| And really strong confidence from our side in being able to execute our plan |
| So one of the reasons why we think gaming is attractive is in the premium space of the category -- of the consumer side also is attractive because it helps us to continue to attract the younger consumers, new consumers to the brand, which is also which is also important for the short term and for the long term |
| And I think the potential financial rewards very attractive |
| Second is to have strong financial returns, better, of course, than buying back shares |
| We delivered it to your home and is great for customers because of convenience, it's great for us because it's more margin per customer |
| And also, as we have shared several times, our goal is to grow more in the premium category, which also has a positive impact on margins |
| So as you just said, we continue to think that HP shares are undervalued, and therefore, buying shares is a good investment |
| And we're making good progress in multiple fronts, so supply chain, demand supply matching customer support, really, we have opportunities across the board |
| Over time, we will integrate more parts of our portfolio as part of the subscription, but it is clearly a differentiated asset, a platform that we can use now to offer additional services as we did with paper and an area of -- an important way to be able to capture more value over time per customer, which is a big driver of growth value for us |
| As we have shared before, we think that reducing digital friction and making it easy for customers to get technology is an important driver of growth |
| unless opportunities with better return M&A that we really think has better inter than that arise |
| It's convenient paper which means customers are delighted to get it, and we are delighted to offer |
| But clearly, the pandemic was a positive effect for -- on the consumer side |
| We are going to see processing power to continue to improve through the year |
| So this will -- this has a positive impact on ASPs |
| That kind of in a sense, one of these PCs is going to be and for consumers or for professionals has three major advantages |
| And we expect us to grow share both in office and in big banks, both categories have higher ASPs than the traditional consumer $29, $49 printer |
| (NYSE:HPQ) Morgan Stanley Technology, Media and Telecom Conference March 4, 2024 11:00 AM ET Company Participants Enrique Lores - CEO Conference Call Participants Erik Woodring - Morgan Stanley Enrique Lores [Starts Abruptly] And we continue to think that the second half will be stronger, driven from the consumer side on stronger seasonality that we see every year and then some recovery on the commercial side, driven especially by window refresh age of the installed base that we know what we expect is going to be a tailwind for us through the second half |
| Consumer, we -- market has started to be closer to normal seasonality and consumer sales are always stronger in the second half than the first half |
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| And we mentioned this as one of the reasons why our gross margin in PCs was slightly below where we expected it to be |
| You've talked about supplies down low to mid-single digits for the year to get there, you need hardware to obviously outperform supplies, but hardware has been challenged recently |
| We also have acknowledged that in the last two years, not for supply chain and operational issues, we lost some share |
| We also, in the commercial space, where we acknowledge that the enterprise and the trial space were weaker |
| It was negatively affected through the pandemic because company shutdown, they reduced their overall investment in capital equipment |
| And as just saying, we expect supplies to decline low to mid-single digits this year and on the long term |
| I think what we see in the office is through the pandemic, we saw a significant reduction of the size of the market |
| Today, we are significantly below 4G |
| We have acknowledged that clearly, macro has not helped in the last 12 months |
| I think on the print side world, our projection is that in the long term, it will be flattish for '24, we expect it to be flattish to a slight decline |
| Maybe let's shift gears a little bit, go back to kind of the traditional conversation about PCs and touch on pricing, because, one, there's going to be commodity cost pressure |
| And when -- always when our leverage stays below because we think it's important for us to stay investment-grade rating, especially in a period of uncertainty as we see now |
| And now given that the return to office has been slow, we see the market smaller than what we were projecting it to be five years ago |
| It's been weak for a while, but this -- it feels like this narrative has kind of emerged maybe the last six months plus about, but what do you think gets this behavior to change or is there going to be a point where you're going to have to -- you and the industry as a whole will maybe have to react to this to take more aggressive steps on pricing? Enrique Lores Well, we are actually reacting and we have shared many times that we have an aggressive plan to reduce our cost structure that will help us to be more competitive |
| We have been driving our cost structure down our fixed cost structure or our permitting cost structure down over the last years |
| Erik Woodring And then maybe just near term before we get into maybe capital allocation before we end is there's a lot of different forces kind of counterbalancing one another this year, meaning higher commodity costs, maybe mix shift towards PCs as they recover, print supplies download to mid-singles |
| In Q1, we acknowledged that in some areas, costs had increased faster than we were expecting |
| And then the market has returned to the level of decline that it had before |
| And it is a business that similar two PCs have been impacted by that |
| So we don't need to rehash that |
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