HP Inc. beats analysts forecast for revenue and earnings in the fiscal fourth quarter

on Nov 29, 2019
Updated: Mar 11, 2020
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  • HP beat analysts' forecast for revenue and earnings in 2019's Q4.
  • Personal system's sales remained upbeat while printing segment was reported under pressure.
  • HP saw weakness in China and a few of the other European markets.
  • HP rejected Xerox Corp's offer for acquisition earlier this month.
  • HP has performed fairly flat on average in the stock market in 2019.

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HP Inc. announced its earnings report for fiscal
fourth-quarter earlier this week. Printing better figures as compared to the
analysts’ estimate for revenue and earnings, the stock was reported to have
gained 3% in extended trading on Tuesday.

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Based on the Refinitiv’s survey, analysts had
forecasted $15.25 billion in revenue for HP in the fourth quarter. Recording $15.41
billion instead, the company beat the analysts forecast by a significant
margin. On the earnings front, 58 cents per share was estimated by the experts
while the company noted 60 cents of earnings per share, as per the Q4 earnings
report.

HP’s Revenue In Q4 Marks A 0.3% Growth Year-Over-Year

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The report further added that HP’s revenue has marked 0.3%
growth (year-over-year) in the fourth quarter. Revenue for the company had
remained downbeat in the past six quarters. 2019’s third quarter had seen a
growth of only 0.1% in terms of revenue.

HP announced on Tuesday that the sales
of desktop and notebook computer systems
have generated $10.43 billion in revenue
for the company in the fourth quarter. In the same quarter last year, revenue
from personal systems was reported almost 4% lower than this. According to FactSet’s
survey of the analysts, revenue from personal systems in 2019’s Q4 was
forecasted to be capped at $10.27 billion.

The printing segment for HP, however, failed to echo
the same positivity in terms of revenue. Noting $4.98 billion in revenue, the
figure was shy of the FactSet’s expected $5.03 billion. Revenue from the
printing segment was also reported to have dropped by 6% year-over-year.

HP Saw Weakness In China And A Few Of The European
Markets

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In an interview, CEO Enrique Lores, commented on the
earnings report that the rising weakness in China and a few of the European
markets have hindered the company’s performance from being even better in the
fiscal fourth quarter.

Earlier in November, Xerox Corp. expressed that it wishes to acquire HP Inc. At $29 billion, HP’s market capitalization is more than three times that of Xerox. An offer valued at $33.5 billion ($22 per share for HP’s shareholders) was rejected by the American multinational information technology company.

HP’s performance in the stock market in 2019 has been
flat on average. Having started the year at $20.63, the stock is currently trading
at $19.79. The gain on Tuesday following the earnings report was seen lost on
Wednesday as the share prices dropped from $20.40 to $19.79 in after-hours
trading. HP Inc. has registered $23.91 as the year-to-date high while $16.03
marks the year-to-date low for 2019.

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