HP beats on earnings and revenue but PC unit slump sinks the stock
Shares in HP Inc. fell more than 9% in late trading today after a third quarter in which the company shipped far fewer personal computers than a year earlier, even though revenue and earnings landed ahead of analyst expectations.
For the quarter that ended on July 31, HP reported adjusted earnings of 83 cents per share, up from 75 cents in the same quarter last year, on revenue of $15.68 billion, up 12.5% year-over-year. Analysts were expecting 69 cents per share on revenue of $14.58 billion. On an unadjusted basis, diluted earnings fell to 71 cents from 80 cents and net earnings dropped to $661 million from $763 million. Tariff refunds added 11 cents to both earnings figures.
Personal Systems shipments fell 16% in the quarter, with consumer units down 19% and commercial units down 14%. Revenue in the segment went the other way, rising 18%, to $11.8 billion, thanks to higher selling prices, at a 4.6% operating margin. HP has been pushing through price increases across its device lineup to cover a global shortage of memory chips, and Reuters reported that Dell Technologies Inc., Apple Inc. and Lenovo Group Ltd. have also raised prices.
