HP Inc. Up 29%, Defies Critics After Hewlett-Packard Breakup
When 75-year-old Hewlett-Packard Co. shook Silicon Valley in one of the most notable corporate break-ups in history, consensus was HPE (Hewlett Packard Enterprise) would be the ‘golden child’ and HP Inc (printers and computers) would be the ‘dinky brother’.
However nearly two years after the separation, critics may have to eat their words, with HP Inc. looking to be the one steaming ahead.
Within the last twelve months, HP Inc’s stock has soared 29%, whilst HPE has climbed a measley 5.3%.
Edward Jone Analyst, David Heger, says “HP Inc. has done surprisingly well for being in PCs and printers. You’re not seeing the results out of HPE that you might have expected. They kind of keep muddying the waters”.
HP Inc’s momentum has come on the back of innovation in higher-end products, which has seen an expansion in revenue, despite overall industry reduction in PC & printer spending.
HP Inc. CEO, Dion Weisler, has successfully streamlined operations while capitalising on opportunities in new markets.
An example is Mr Weisler’s decision to spend around $1 billion on Samsung Electronics Co.’s printer business, which is expected to assist HP’s new push into the market for larger photocopiers which include printing features.
Weisler has also heavily reduced inventory levels of printer supplies (by more than $400 million over several quarters) and has altered how the products are priced and sold, in order to keep long term health for the unit.
HP Inc. is also working to increase adoption of its 3D printing business.
Wall Street has clearly noted HP Inc’s efforts. Investor, GoodHaven Capital Management, backed out of HPE shares earlier this year, however in the last year has added HP Inc. shares to his portfolio.
President of HP Inc.’s Imaging, Printing and Solutions business says, “Clearly the separation has been positive for us. We have been able to do things that we would have never been able to”.