HP gives up $1 billion in annual sales as it leaves Russia • The Register
PC and printer giant HP Inc. is boldly but belatedly turning its back on Russia and Belarus due to the continuing conflict in Ukraine.
HP was among the first wave of tech companies to suspend shipments to countries shortly after Russia invaded its neighbor on Feb. 24, but now the company’s president and CEO, Enrique Lores, makes this decision more permanent.
“Given the COVID environment and the long-term outlook for Russia, we have decided to stop our business in Russia and have started the process of fully winding down our operations,” he said during a briefing. a conference call with analysts on the second quarter results.
The reason this move deserves special attention is that there is a dollar figure associated with the withdrawal. Lores says “the business there was about $1 billion in revenue in fiscal year 2021,”
This is a much larger hit than several other tech vendors expect to take from the Russian market in 2022. Adobe is forecasting a hit of $75 million this year, and RPA provider UiPath said that it would cost $15 million. Dell halted shipments to Russia in early March, and Lenovo halted them as well.
Cisco last month warned investors that the war in Russia had cost it up to $200 million in lost sales in the third quarter. More importantly, it said the conflict as well as the lockdown in Shanghai, which has disrupted local manufacturers and caused supply chain repercussions, will cost it between $131 million and $720 million in its current fiscal year. .
Schneider Electric goes one step further and sells its Russian operations to local management, writing off $315 million in the process.
HP’s Lores revealed Russia and Belarus exit as HP released financial results for its fiscal 2022 second quarter ended April 30: Revenue rose 4% to $16.5 billion , including a 9% rise in the Personal Systems group to $11.532 billion, and a 7% drop in printing to $4.963 billion.
In the PC unit, notebooks rose 3% to $7.734 billion and desktops rose 28% to $2.855 billion as enterprise customers renewed their fleets.
Lores said: “The growth this quarter is really helped by an easy comparison to last year. If you remember last year, not many companies were investing in office equipment. ‘desktops and workstations. And now we’re seeing the reverse effect because some of that investment is coming back.”
In print, the CEO said HP continues to “operate within our limited component and logistics environment, and performance was also impacted by macro events this quarter.”
He added: “We expect supply chain dynamics to improve, but continued shortages, particularly in application-specific built-in secrecy, will impact printing for the rest. of the year.
“We are actively working with our partners to mitigate risk by running dual sourcing as much as possible and redesigning our printer safety panels and components.”
Gartner Research Director Ranjit Atwal said of the decision, “Many U.S.-based companies are taking a stand to show they’re attracting new employees and keeping old ones they ‘care’ about. world. It’s more about employee care than revenue. Revenue of $1 billion in 2021 is already down.”
HP Inc. reported net income of $1 billion for the period, down from $1.228 billion in the same quarter last year. ®