HP Inc., the half of the former Hewlett-Packard Co. that continues to make printers, laptops, workstations and sell lots of ink, Feb. 23 reported better-than-expected results for Q1 2017 and saw its stock zoom 8.6 percent to $19 per share after trading closed on the day.
HP Inc.'s top and bottom lines surpassed Wall Street analysts' projections. HP's total revenue increased 3.6 percent year over year to $12.7 billion and beat the Zacks Investment Research estimate of $11.774 billion.
The good top-line performance was driven mainly by strength in the Personal Systems segment and strong sales of newly launched products, including the company's new Chrome notebooks and high-end notebooks and laptops.
HP's net income from continuing operations came in at $655 million, or 38 cents per share, compared with $645 million, or 36 cents per share, reported a year ago.
Hewlett-Packard Co. split itself into two standalone companies — HP Inc. (HPQ) and Hewlett-Packard Enterprise (HPE) on Nov 1, 2015. Following the split, its PC and printer business has been operating as HP Inc., while Hewlett-Packard Enterprise specializes in commercial tech products.
The stock has gained 50.3 percent during the last one year, outperforming the Zacks categorized Computer-Mini Computers industry's return of 41.27 percent.
The Personal Systems segment earned revenues of $8.22 billion, compared with $7.48 billion reported in the year-ago quarter. Commercial revenues increased 7 percent, while consumer revenues increased 15 percent. The company witnessed an 8 percent rise in total shipments mainly driven by a 12 percent increase in notebook unit shipment, while desktops unit shipments were flat on a year-over-year basis.
Printing revenues were down 3 percent year over year to $4.48 billion, primarily due to a 3 percent plunge in supplies revenues. HP's total hardware unit sales increased 6 percent primarily due to an increase of 2 percent in commercial hardware units and a 7 percent increase in Consumer hardware units.
HP ended the fiscal first quarter with cash and cash equivalents of $6.331 billion compared with $6.288 billion in the previous quarter. The company had long-term debt of $6.688 billion, compared with $6.758 billion last quarter.
The company generated cash flow of $767 million from operational activities during the quarter. During the same period, the company repurchased 25.5 million shares and paid dividends worth $227 million.