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SAN FRANCISCO — Printer ink has long been Hewlett-Packard Co.'s cash cow, because it's expensive and customers refill constantly. Pressure in recent quarters has raised questions about the prospects for that part of HP's business.
On Tuesday, HP CEO Mark Hurd took a number of questions about the health of HP's printing supplies business, in which sales fell 13 percent in the latest quarter, ended July 31.
HP maintained that demand for ink hasn't budged much, and that the revenue decline was caused by currency fluctuations and changes in the way HP manages its inventory at resellers.
QUESTION: Can you talk about your outlook next quarter for printing supplies?
ANSWER: In terms of supplies and our forecast for supplies, we expect it to be down less than it's been in the last couple of quarters. So what we're calling for, as long as currency stays in this range, is that it will uptick a bit. There are still some channel inventory adjustments, which I would categorize as fine tuning, that still need to be done. ... The end customer is buying roughly the same amount of supplies as a year ago, when you look at end demand. So what we're getting now is less currency that's going to hit that number, so that's going to go down, and we've corrected for the most part at a macro level, and we feel good about where the channel inventory is. ... As we start working off the inventory, and the currency starts to normalize, and really the key thing for us is that end-user demand — the fact that people are really just simply printing as much as they were last year. So we just have to get through the currency and inventory correction and we'll be going from there.
