HP Inc tops analysts’ estimate for net sales by £760 million in Q3

HP Inc. (NYSE: HPQ) said on Thursday that its net sales in the fiscal third quarter came in a massive £760 million higher than what the analysts had anticipated. The company attributed higher sales to COVID-19 that fuelled demand for personal computers in recent months.

Shares of the company jumped roughly 3% in after-hours trading on Thursday. At £14.62 per share, HP Inc. has now recovered about 40% since March when it printed a year to date low of £10.10 per share. The Palo Alto-based company was trading at £15.50 per share at the start of 2020. Can’t pick a stockbroker to invest online? Here’s a simple comparison of a top few for you to make an informed decision.

HP’s Q3 financial results versus analysts’ estimates

At £556 million, its net income in Q3, however, declined from £910 million in the comparable quarter of 2019. On an adjusted basis, HP reported 37.12 pence of earnings per share versus the year-ago figure of 43.94 pence a share. Earlier this week, HP was named a leader in IDC MarketScape Worldwide Print Transformation 2020 vendor assessment

According to the technology company, its revenue saw a 2% decline on a year over year basis in the third quarter to £10.83 billion from £11.06 billion last year. The decline, as per HP, was due to its struggling printing division. In related news, its U.S. competitor, Dell Technologies revealed an 18% annualised growth in Q2 consumer sales on Thursday.

As per FactSet, experts had forecast the company to print £10.08 billion in sales in the recent quarter. In terms of earnings per share, their estimates were capped at 32.58 pence.

CEO Enrique Lores’ remarks on Thursday

CEO Enrique Lores of HP Inc. commented on the earnings report on Thursday and said:

“PC sales were great. They have become essential. We are seeing a trend where there used to be one to two PCs per home; now, it is one per person at home because they are needed for work and learning. This is driving demand.”

For the fiscal fourth quarter, the American multinational now expects its adjusted EPS to lie in the range of 37.88 pence per share to 40.91 pence per share. Analysts also predict 37.88 pence of earnings per share for HP in Q4.

At the time of writing, HP Inc. is valued at £20.26 billion and has a price to earnings ratio of 9.18.