HP Profit Tops View, Lifts FY Outlook; Shares Up 7%
HP Inc. (HPQ), the PC and printer business of the former Hewlett-Packard Co., on Thursday reported a profit for the first quarter that increased from last year and trumped analysts’ expectations driven largely by a higher-than-expected revenues.
The PC giant detailed a second-quarter and full year outlook above current market consensus, sending its shares up 7 percent extended session.
HP’s first-quarter profit rose to $1.94 billion or $1.16 per share from $611 million or $0.36 per share last year. Excluding one-time items, adjusted earnings for the quarter rose to $0.48 per share from $0.38 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.42 per share.
Revenues for the quarter rose 14 percent to $14.52 billion from $12.68 billion last year. Analysts had a consensus revenue estimate of $13.49 billion for the quarter.
HP, like other personal computers, has been negatively impacted by lower demand for PCs and notebooks as consumers have switched to tablets and smartphones. However, the company’s recent shift in focus to a more high-end premium models and cost savings initiatives has worked in its favor.
In the first quarter, Personal Systems revenues rose 15 percent to $9.44 billion, while total printing segment revenues gained 14 percent to $5.08 billion.
HP had separated into two independent companies Hewlett Packard Enterprise Co. (HPE) and HP Inc. Hewlett Packard Enterprise, with more than $50 billion in annual revenue, provides technology solutions, while HP Inc. supplies PCs and printers.
Looking forward to the second quarter, HP expects adjusted earnings of $0.45 to $0.49 per share. For the full-year 2018, HP now sees adjusted earnings of $1.90 to $2.00 per share. Earlier, HP expected full year adjusted earnings of $1.75 to $1.85 per share.
Analysts currently estimate earnings of $0.44 and $1.81 per share for the second quarter and full year 2018.
HPQ closed regular trading at $21.39, up $0.22 or 1.04%, on the NYSE. The stock further gained $1.67 or 7.81% in the after-hours trade.
by RTT Staff Writer
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