HP gains 6% in the stock market following better than expected financial performance in the first quarter

HP
announced its performance results for the first quarter on Monday that declared
the company to have made better than expected earnings and revenue in the recent
quarter. Following the earnings report, the company also gave guidance for its earnings
in fiscal 2022. Monday’s announcement also expressed HP’s plans of expanding
its share buyback program.

Share
prices were reported 6% higher in after-hours trading on Monday following an
upbeat performance report. At $23.35 per share, HP currently boasts a little over
10% gain in the stock market in 2020 so far. HP’s performance in 2019, however,
remained flat on average.

HP’s
Results Versus Analysts’ Estimates

According
to Refinitiv, analysts were expecting the company to print $14.59 billion in
revenue in the first quarter. In terms of earnings, their estimate was capped at
54 cents per share. In its report on Monday, HP announced to have generated a
higher $14.62 billion in revenue in the recent quarter while it beat the
analysts’ estimate for earnings by a significant margin at 65 cents per share.

In
the quarter that ended on 31^st January, HP’s revenue was reported to
have seen a 0.6% decline on an annualized basis. Last October, HP had launched
a share buyback program that was valued at $5 billion. In its statement on
Monday, the company expanded the program and authorized $15 billion worth of
shares to be repurchased. By fiscal 2022, HP is targeting $16 billion in share
buyback.

With
a 2% increase, HP’s personal systems unit generated $9.89 billion in revenue in
the first quarter that came out shy of the analysts’ estimate at $10.52
billion. Experts had forecast $4.85 billion in revenue from HP’s printing unit
in Q1. Losing 7%, the segment reported a much lower $4.72 billion in revenue in
the recent quarter.

HP’s Guidance For Fiscal 2020

HP
also said on Monday that it now expected to make $2.33 to $2.43 of earnings per
share in fiscal 2020. Analysts, on the other hand, have estimated HP’s EPS at
$2.25 this year.

For
fiscal 2022, HP highlighted $3.25 to $3.65 of earnings per share (excluding
items) in its guidance. Experts, however, capped their 2022 earnings forecast
for HP at a much lower $2.35.

In
terms of operating margins, HP
said that its long-term goal for the personal systems segment is to hit
3.5% to 5.5% while a much higher 16% to 18% was highlighted for its printing
unit.