HP Results Show Improving PC Sales
HP said that for the period ending Oct. 31, sales of PCs rose 4 percent from a year ago, to $8.02 billion, as sales to consumers climbed 7 percent and business-related PC sales rose 3 percent from last year's fourth quarter.
With PC sales in the lead, HP reported a quarterly profit of 30 cents a share, on $12.5 billion in revenue, compared to earnings of 83 cents a share on sales of $12.3 billion in the year-ago period. Excluding one-time items, HP earned 36 cents a share. Analysts surveyed by FactSet had forecast HP to earn 37 cents a share on $11.8 billion in revenue.
"We're proud of the progress we are making. Change equals opportunity," said HP Chief Executive Dion Weisler [pictured here], on a conference call to discuss the company's results. "The macro economic conditions remain uncertain, but we know how to operate in up and down markets."
The earnings report came three weeks after the first anniversary of the old Hewlett-Packard splitting into two companies. HP took responsibility for PCs and printer technologies, while Hewlett Packard Enterprise (HPE) now handles many corporate-level products such as storage, servers and networking.
Patrick Moorhead, an analyst with Moor Insights & Strategy, said that HP's results suggest the company is taking the right steps to build up its business in the wake of Hewlett-Packard's split, while showing that the market for PCs remains viable.
"HP surprised many with their increased revenues driven by PCs during a rough time in both the PC and printer market," Moorhead said. "HP's premium PC and gaming strategy is starting to kick in and and drove a lot of their revenue increase for the quarter."
While HP's PC business showed signs of improvement, its printing business declined, led by a 12 percent drop in sales of printing supplies. Overall, HP's printing revenue slipped by 8 percent to $4.56 billion.
"The interest in PC's overall in the last quarter was good, although we see headwinds for PC demand in the next quarter," said Tim Bajarin, director of tech consultancy Creative Strategies. "The key reason is the unknown economic impact of a Trump presidency on (HP's) future jobs and earnings. This theme was consistent as they take a cautionary position on spending until they see how the economy will be in the next six months."
For its fiscal first quarter, HP said it expects to earn between 35 cents and 38 cents a share, excluding one-time items, while analysts had forecast the company to earn 38 cents a share.
As HP reported its results, HPE also turned in a quarterly profit of 18 cents a share, on $12.5 billion in revenue. Excluding one-time items, HPE earned 61 cents a share, while Wall Street analysts had forecast the company to earn 60 cents a share on sales of $12.8 billion.
HP shares fell as much as 2 percent in after-hours trading, but then recovered to reach $15.95, which is where the stock finished at the end the regular market session.
Source: CIO Today