posted better-than-expected quarterly results, while boosting its earnings forecast for the full fiscal year, driven by strength in its personal computer business.
For the fiscal first quarter ended in January, HP (ticker: HPQ) had revenue of $17 billion, up 8.8% from a year earlier and ahead of Wall Street’s consensus forecast of $16.5 billion.
Non-GAAP profits were $1.10 a share, above both the high end of the company’s guidance range of 99 cents to $1.05 a share and the analyst consensus as measured by FactSet of $1.02 a share. Under generally accepted accounting principles, the company earned 99 cents a share, ahead of the company’s target range of 92 cents to 98 cents a share.
HP CEO Enrique Lores told Barron’s that the company is showing good progress on its portfolio of growth businesses, including 20% growth in gaming PC revenue in the quarter, more than 40% growth in peripherals, and more than 20% growth in industrial graphics and 3-D printing. At this point, HP isn’t disclosing specific revenue totals for those businesses.
In PCs, he added, HP is seeing especially strong demand in “commercial and premium” categories, while making progress in reducing what has been an abnormally high backlog of orders. He said the supply-chain situation is improving in some areas, although he noted that the HP printing business in the quarter remained supply constrained. He pointed out that many HP printers are sourced in parts of southeast Asia where the pandemic remains a serious issue, hampering manufacturing.
HP repurchased $1.5 billion of common stock in the quarter. That puts the company on the way to fulfilling its previous commitment to buy back at least $4 billion of stock in the current fiscal year. Lores said the company continues to believe HP shares are undervalued.
HP said its Personal Systems segment, which includes its PC business, had first-quarter revenue of $12.2 billion, up 15% from a year ago and well ahead of Street consensus forecasts of $11.6 billion. Notebook sales were $8.4 billion, up 14% year over year and 1% sequentially, while desktop PC sales were $2.8 billion, up 17% from last year and 12% higher sequentially.
The company said commercial revenue in the segment was up 26%, while consumer revenue was down 1%. PC units were down 6%, reflecting a 9% decline in notebooks and a 3% increase in desktops.
Printing revenue was $4.8 billion, down 4% from a year ago, and 1% lower sequentially, hampered by a combination of slower postpandemic consumer sales and supply constraints. A 9% increase in commercial print revenue was offset by a 23% decline in consumer hardware revenue. Supplies revenue was $3.1 billion, down 2% from a year ago. Total printer hardware units were down 28%, with consumer off 31%, and commercial down 3%.
For the April quarter, HP is projecting non-GAAP profits of $1.02 to $1.08 a share; the Street consensus had been $1.02 a share. The company said that results would be trimmed by about three cents a share to reflect HP’s compliance with new government sanctions on shipping technology products to Russia.
For the full year, HP now sees non-GAAP profits of $4.14 to $4.38 a share, above the company’s previous target of $4.07 to $4.27 a share. The previous Street consensus was $4.17 a share.
Write to Eric J. Savitz at [email protected]