HP Inc tops estimates, raises full-year adjusted profit forecast
Shares in the company down 3% in after-market trading after results announced
HP Inc’s personal systems business, which includes desktops and notebooks, rose 12 per cent to $9.4 billion. Photograph: Reuters
HP Inc reported better-than-expected quarterly results and raised its full-year adjusted profit forecast on Thursday, as it benefits from strong growth in its personal systems business and its acquisition of Samsung’s printer business.
Shares of the company, formed out of the 2015 split of Hewlett-Packard, were, however, down 3 per cent in after-market trading in low volumes.
Susquehanna analyst David Ryzhik attributed the weakness in shares to disappointing margins at the company’s printer business.
Investors had expected to see sequential increase in margins following the acquisition of Samsung’s printer business late last year, Mr Ryzhik said.
“Their printing business operating margins were underwhelming.”
Margins at the business fell for the third straight quarter, while revenue from the segment rose about 11 per cent to $5.19 billion (€4.46), above analysts’ estimate of $5.11 billion (€4.39 billion).
HP Inc’s personal systems business, which includes desktops and notebooks and accounts for more than 60 per cent of total revenue, rose 12 per cent to $9.4 billion (€8.08 billion), beating analysts’ average estimate of $9.06 billion (€7.79 billion), according to Thomson Reuters I/B/E/S.
The Palo Alto, California-based company had the top position in worldwide PC shipments in the second quarter with a 23.9 per cent market share, according to research firm International Data Corp’s data.
HP Inc raised its forecast for full-year adjusted profit to between $2 and $2.03 per share, from $1.97 and $2.02 per share earlier. Analysts on average were expecting $2, according to Thomson Reuters I/B/E/S.
Excluding items, HP Inc reported a profit of 52 cents per share for the third quarter ended July 31st, one cent above the average analyst estimate.
Net revenue rose about 12 per cent to $14.59 billion (€12.54 billion).