HP bets high on 3D printers to spark growth

Hewlett-Packard is set to unleash a portfolio of 3D printers next year to spark growth. The computer and printer company plans to release consumer and industrial-grade 3D printers in 2014, leveraging its massive paper printing business. But CEO Meg Whitman, who first discussed the plan late last month, said that the impact on the still-struggling corporation's bottom line will be modest for some time.

"This is an acorn in 2014 and 2015 with very good long potential," Whitman said. "There's a lot of potential to print in ways most consumers and companies would find acceptable," and 3D printers use "some of the same technologies" as HP's paper printer group.

Printer and PC sales were dropped marginally, though HP claimed its results outperformed declines in the overall industry. For the fiscal year that ended Oct. 31, HP's revenue fell seven percent to $112.2 billion. The company eked out a $5.1 billion profit following a $12.6 billion loss in 2012. It expects earnings per share in the coming fiscal year to rise slightly to a range of $2.85 to $3.05.

HP's "turnaround was not linear," but the company is making "great progress," especially in reducing debt and improving cashflow, Whitman said. Nevertheless, continued challenges are expected in its core businesses. Industrywide shipments of traditional PCs fell 9.5 percent in the last three months amid rising DRAM prices. And Cathy Lesjack, HP's chief financial officer, said revenue declines could be even steeper this quarter as a result of continued high memory prices.

"It's too early to tell how demand for convertibles is going," Whitman said. "We have a lot of innovative form factors, and we'll know more after this Christmas season."

As many as 24,600 people left HP last year as it cut about $2 billion in labor costs, including a significant part of its R&D in Unix servers. Another 33,000 or more will leave in 2014 as HP tries to trim another $1.1 billion. That said, HP added to its overall engineering ranks in its last fiscal year. In 2014, it aims to increase its overall R&D spending, which slumped in the last 12 months.

Networking gear and servers were the only bright spots in otherwise depressed sales for the year. Even in those sectors, sales growth was razor thin. HP reported these fiscal 2013 results. Networking and server revenue rose two percent from the previous year with a 14.5 percent operating margin. Printing revenue fell one percent with a 17.7 percent operating margin, while personal systems revenue fell two percent with a three percent operating margin. Additionally, software revenue fell nine percent with a 30.8 percent operating margin. Likewise, enterprise services revenue declined nine percent with a 4.4 percent operating margin.