HP’s printer and ink business used to gush money. Those days may be over.

The company announced a major restructuring at its 2019 securities analyst meeting on Thursday. HP will reduce its workforce of 55,000 by 7,000 to 9,000—a cut of 13% to 16%. The move is supposed to save $1 billion a year by the end of 2022. To entice investors, HP mentioned a 10% boost in stock dividends and increased share buybacks.

The news sent shares reeling by 9.6% at October 4’s market close. Morgan Stanley, Credit Suisse, and Bank of America all lowered their share price targets by a dollar or more. Loop Capital downgraded it from “buy” to “hold,” which is on top of September downgrades by Sanford C. Bernstein and UBS.

The surface issue is the printing business. But going deeper, investors and analysts aren’t confident that HP can evolve to keep up with drastically changing times.

HP misses all that liquid gold

The lifeblood of HP—the printing and PC unit that resulted from the 2014 split of the original Hewlett-Packard—is the sale of printer ink.

In the first nine months of 2019, computers (HP’s personal systems division) brought in $28.3 billion for the company. The printing division, at $15.1 billion, seems like the weaker sibling. But look at operating margins, and the picture flips.

In the quarter ending July 31, 2019, personal systems had an operating margin of 5.6%. Printing, with a 15.6% margin, brings in the big profits. And almost 65% of the printing division revenue in those nine months ending July 31, 2019 came from “supplies.” That’s ink.

The traditional printing business model functions similarly to that of the razors and razorblades business. Companies sell razors to consumers at low prices, then once they are locked in, the blades—like ink—are expensive, creating a high profit-margin item users buy over and over.

These are the profits that subsidize so much elsewhere in the company. Unfortunately for HP, the ink market has been changing for years. “People are going offline and buying off-brand,” says John Roy, lead analyst in IT hardware, services, and networking for UBS.

“Specifically [it’s] the purchase of replacement ink cartridges by commercial accounts” that is the big problem, says Jim Kelleher, director of research and senior technology analyst for Argus Research. HP is strong in retail sales. But those commercial customers are increasingly buying substitute cartridges online to save money. “So, the highest-margin part of this business, which has higher margins than the PC business, is now under siege. The concern is that this crown-jewel business must contend with secular decline in margins.”

HP's plan is to break its printing product lines into two categories. Like cell phones, some will come at a premium price but be unlocked, so users can choose any ink they want. The other type are priced cheaper but only work with HP cartridges. There’s no word yet on the premium for the unlocked printer hardware or how much ink would run in either case.

“They feel like they have [an ink] cost advantage versus the competition,” Roy says. In theory, HP could presumably drop its ink price below whatever the off-brands could afford to charge.

Investors balk

HP may believe in its plans, but the sudden share drop and analyst downgrades and price-target reductions show investors don’t like what they hear. That may be for two reasons.

“It’s certainly possibly they could have a strategy that works,” Roy of UBS says. “[But] it doesn’t fit my experience.” Such a shift requires an enormous change on the part of HP’s customers, who may not like being told to pay more for printers or ink.

An HP spokesperson pointed to the restructuring announcement that quoted incoming HP CEO Enrique Lores as saying, “We are taking bold and decisive actions as we embark on our next chapter. We see significant opportunities to create shareholder value and we will accomplish this by advancing our leadership, disrupting industries and aggressively transforming the way we work. We will become an even more customer-focused and digitally enabled company, that will lead with innovation and execute with purpose.”

But there are deeper concerns. “Their model is flawed” and has been for a long time, says Marty Wolf, president and founder of IT investment advisory firm martinwolf M&A Advisors. “If you look at [both HP and HPE, the other spin-off from the 2014 breakup], they compete across 15 or 20 of the most complex verticals, and you have to be best of breed. They needed to be broken up in 20 companies. They don’t need an executive [like Lores, who was head of the printing division] with experience in PCs and printers. They need an executive with experience in restructuring.” (Recently other companies like eBay have found themselves under pressure to shed non-related assets.)

The HP spokesperson responded with a reference to the company’s CEO succession announcement of Aug. 22, 2019, which characterized Lores as “a key architect of one of the largest and most complex corporate separations in business history” and “instrumental in transforming HP’s cost structure while simplifying the organization and creating the capacity to invest in innovation to drive profitable top and bottom-line growth.” In the same announcement, HP board chairman Chip Bergh, who is CEO of Levi Strauss, called Lores “an inspiring and proven business leader” who was “the board’s unanimous choice as a successor.”

Also, with previous financial filings seeming strong, this sort of announcement shouldn’t result in tanking shares. “Usually the market views that as the company trying to take better control of a situation,” says Chester Spatt, a professor of finance at Carnegie Mellon University’s Tepper School of Business. “Maybe the market thinks there’s adverse information in this.”

With an earnings announcement expected in November, we’ll soon find out if there’s more bad news to come. If that’s the case, investors might decide HP’s cartridge has run dry.

惠普的打印机和油墨业务曾经是公司的摇钱树，但如今可能已经是明日黄花。

惠普今年宣布了重大重组计划。根据这一计划，公司将裁员7000至9000名，占其5.5万名员工总数的13%至16%。据预计，此举在2022年年底之前每年将为公司节约10亿美元的费用。为了调动投资者的积极性，惠普提到了增加10%的派息，以及加大股票回购力度。

此消息一出，惠普股价在10月4日收盘时下跌了9.6%。摩根士丹利、瑞士信贷和美国银行均将其目标股价下调了1美元或更多。Loop Capital将其股票评级从“买入”降为“持有”，此前，Sanford C. Bernstein和UBS在9月便已经下调了其评级。

从表面上看，问题出在打印业务上。但如果深究起来，问题的结症在于投资者和分析师对惠普跟上时代巨变步伐的能力表示怀疑。

惠普念念不忘的液体黄金

惠普的命脉——惠普2014年拆分后所形成的打印和计算机部门——来自于打印机油墨的销售。

2019年前9个月，计算机（惠普的个人系统部门）业务营收达到了283亿美元，而营收151亿美元的打印业务营似乎有些不够看。不过，如果说到运营利润率，局面出现了反转。

截至2019年7月31日的季度，个人系统的运营利润率为5.6%。打印业务利润利润率达到了15.6%，是公司利润的主要贡献者。截至2019年7月31日的前9个月，打印部门近65%的营收来自于“耗材”，也就是油墨。

传统的打印业务模式与剃须刀和刀头的模式类似。销售剃须刀的公司会以低价向消费者销售剃须刀，一旦锁定客户之后，刀头（油墨）卖的并不便宜，继而打造了一个用户不断购买的高利润产品。

这些利润为公司众多的其他开支项提供了资金。对于惠普来说，不幸的是，油墨市场多年来一直处于变化当中。瑞士联合银行的IT硬件、服务和网络首席分析师约翰·罗伊说：“人们正在线下购买一些不知名品牌。”

Argus Research的研究总监、科技行业高级分析师吉姆·科勒赫表示，具体来说最大的问题在于，“商业客户开始购买替代油墨墨盒。”惠普的零售销售业绩十分强劲，但那些商业客户正越来越多地在线购买替代墨盒来省钱。“因此，作为惠普利润最高且利润率超过了个人电脑的业务，油墨如今也遭到了围攻。问题在于，惠普的这颗掌上明珠也不得不面对利润率长期下滑的现实。”

惠普的计划是将其打印产品线拆分为两个门类。像手机一样，一个门类将以高价出售，但不会设限，这样，用户可自行选择油墨。另一个门类的价格更便宜，但只能使用惠普的墨盒。惠普没有透露有关不设限打印机的硬件以及两类产品用墨量的具体信息。

罗伊说：“他们觉得自己在竞争中拥有[油墨]成本优势。”理论上，惠普大概可以将其油墨价格降至任何不知名品牌难以承受的价位。

投资者担心

惠普可能对其计划充满了信心，但突如其来的股价下跌、分析师的评级下调以及目标价格的减少反映了投资者对于自己的所见所闻并不满意。原因可能有两点。

瑞士联合银行的罗伊说：“很有可能，他们已经制定了能够奏效的策略。[然而]，从我的经验看来，这一点不太现实。”这种转变要求惠普的客户做出巨大的调整，而对打印机或油墨加价的做法可能会让他们感到不悦。

一位惠普的发言人提到，重组声明中引用了即将上任的惠普首席执行官恩瑞克·洛瑞斯的原话：“在我们即将踏上新征程之际，我们将采取大胆、果断的行动。我们在创造股东价值方面看到了大量的机遇，而且我们将通过提升领导力，颠覆行业，以及积极地转变我们的工作方式来实现这一目标。我们将成为一家更加注重客户的数字化企业，而且凸显创新引领和目的性执行。”

但这里存在更深层次的顾虑。IT投资顾问公司martinwolf M&A Advisors的总裁及创始人马蒂·沃尔夫说：“这个模式存在漏洞”，而且很久之前就已存在。“如果我们看一下[惠普和2014年拆分形成的另一家公司慧与]，它们参与竞争的最复杂的垂直业务领域达到了15到20个，而且每一个领域都得拔尖。它们应该被拆分为20家公司。公司需要的并不是懂个人电脑和打印业务的高管[例如曾经执掌打印部门的洛瑞斯]，而是有重组经验的高管。”（最近，像eBay等公司发现自己在剥离非关联资产时倍感压力。）

惠普的发言人在回应中提到了公司的首席执行官在2019年8月22日做出的后续声明。这位发言人将洛瑞斯描述为“一名关键的构建师，他执行了商业史上最大、最复杂的企业拆分”，而且“在惠普成本架构的转型过程中发挥了至关重要的作用，同时还简化了组织构架，打造了投资创新的能力，以推动盈利性的营收和盈利增长。”在同一个声明中，惠普董事长、李维斯首席执行官齐普·伯格将洛瑞斯称为“一位鼓舞人心、久经考验的商业领导者”，他是“董事会全票通过的首席执行官继任者”。

此外，有鉴于此前看似强劲的财报，这类声明不应引发股价的大跌。卡内基梅隆大学泰珀商学院的金融学教授切斯特·斯帕特说：“市场通常将其看作公司试图更好地控制这一局面。可能市场从中看到了一些负面信息。”

惠普预计于11月发布公司财报，我们很快就能够知道是否还会有更多的负面消息流出。如果是这样，投资者可能会认定惠普的墨盒将成为明日黄花。（财富中文网）

译者：冯丰

审校：夏林