Personal computer and printer hardware giant HP Inc. revealed a big jump in fiscal first-quarter PC sales and overall revenue.
It offered strong guidance for the next quarter and fiscal year too, pouring scorn on any suggestions that the latest PC boom may be coming to an end.
The company reported net income of $1.08 billion, with earnings before certain costs such as stock compensation coming to $1.10 per share. It also delivered record revenue of $17 billion, up 9% from a year ago. The results breezed past Wall Street’s targets of $1.02 per share in earnings and $16.5 billion in revenue.
HP President and Chief Executive Enrique Lores (pictured) said the company’s strong top- and bottom-line results were driven by strong demand for its products, combined with its leadership in the hybrid computer segment.
“Our Q1 performance was particularly strong across our key growth areas that collectively grew double digits including gaming, peripherals, workforce solutions, consumer subscriptions, and industrial graphics and 3D,” he said. “Our performance reflects progress against our strategy to build a stronger HP.”
HP said personal systems sales, which include desktop computers and laptops, accounted for the lion’s share of its revenue with sales rising 15% from a year ago, to $12.2 billion. Analysts had forecast the segment to do just $11.6 billion in sales.
Within the segment, surprisingly perhaps, workstation sales showed the most growth at 40%, followed by desktops at 17%. Notebook revenue rose 14%.
Lores told MarketWatch in an interview that HP had seen hypergrowth in gaming, industrial 3D and peripherals, with all three segments growing more than 20% year-over-year. He added added that the global PC market is now $200 billion bigger than what it was before the COVID-19 pandemic. He said the new “hybrid world” where people work and play will likely remain “for the foreseeable future.”
The strong growth in PC sales helped offset a decline in HP’s other main business. The company reported that printer sales fell 4%, to $4.8 billion. That is probably not surprising considering many workers remain at home and more business continues to be done online.
Looking to the next quarter, HP offered an earnings forecast of $1.02 to $1.08 per share, the midpoint of which is ahead of Wall Street’s target of $1.02 per share. For fiscal 2022, HP updated its earnings guidance and said it now sees income in the range of $4.18 to $4.38 per share. That’s comfortably ahead of Wall Street’s forecast of $4.17 per share.
HP also revealed it will return $1.8 billion to shareholders via share repurchases and dividends.
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