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Techprint

HP, Inc. Shares Tumble to a New Post-Split Low

By
Jonathan Vanian
Jonathan Vanian
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By
Jonathan Vanian
Jonathan Vanian
Down Arrow Button Icon
November 25, 2015, 5:42 PM ET
HP Inc CEO Dion Weisler (crop)
HP Inc CEO Dion Weisler (crop)Courtesy: Hewlett-Packard

HP, Inc. had a bad Wednesday on Wall Street after the printer and personal computer maker delivered quarterly results that fell short of analyst expectations.

Shares (HPQ) in the company dropped 13.7% to $12.64.

The close marks a new low for HP, Inc. following its split on Nov. 1 from its data center hardware and software sibling Hewlett Packard Enterprise (HPE). It’s a sign that investors believe there is no quick fix for HP, Inc., which is struggling amid declining sales.

On Tuesday, in its earnings report, HP, Inc. said that sales of both printers and PCs had declined 14% year over year. Mark Moskowitz, a Barclays equity analyst, said in a research note that investors knew the market for printers was bad, but were probably still surprised by how badly the company performed.

In a call with analysts, HP, Inc. CEO Dion Weisler explained some of the hurdles facing his company including having to discount some high-end printers mostly aimed at corporate customers. But following the price cuts, consumers bought a large number of the printers, which led to the unintended consequence of selling less ink because consumers print less often.

HP, Inc. executives on the call tried to reassure analysts that it’s altering its sales and marketing strategy to ensure a similar snafu doesn’t happen again. However, Moskowitz was unsatisfied:

While HP Inc. stated it is taking action to improve its sales motion, we think the underlying demand and market conditions fanning the actions foretell of a few more setbacks before the operating model bottoms.

Still, not everyone is counting HP, Inc. out. Deutsche Bank analyst Sherri Scribner remained optimistic that the company can recover. She wrote in a research note that “the company can outgrow its peers and end markets, driven by market share gains and a focus on profitable growth opportunities.”

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About the Author
By Jonathan Vanian
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Jonathan Vanian is a former Fortune reporter. He covered business technology, cybersecurity, artificial intelligence, data privacy, and other topics.

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