HP: weaker-than-expected quarter despite printers

(CercleFinance.com) - Last night, HP reported weaker-than-expected quarterly results, despite solid demand for its printers, and also unveiled lower-than-expected forecasts.


The California-based technology group, which brings together the former Hewlett-Packard hardware activities, announced on Tuesday sales down 0.3% to $53.6 billion for its fourth fiscal quarter, which ended in October.

While its PC division saw sales rise by 2% to $9.6 billion, in line with market expectations, its printer division posted sales of $4.5 billion (+1%), a performance above consensus forecasts.

At 19.6%, the latter's margin is well above its long-term historical average, which ranges from 16% to 19%, as noted by professionals.

At $0.93, the Palo Alto, California-based company's earnings per share (EPS) for the quarter missed the consensus target of $0.94 per share.

Another cause for concern is that HP has announced an EPS target for the first quarter of its 2024/2025 financial year of between $0.70 and $0.76, whereas the consensus was expecting $0.85.

Despite these cautious forecasts, analysts at UBS - who have a 'neutral' opinion on the stock with a price target of $37 - say they are betting on a recovery in the PC market next year due to the aging of the current fleet and the prospect of a new version of Windows 10 coming out in October 2025.

After climbing 13% over the past three months, compared with a 0.7% rise for the S&P 500 index, HP shares were subject to profit-taking on Wednesday on Wall Street, dropping more than 12% during the morning.

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