HP Q4 profit jumps 120%, beats estimates

Printer and PC maker HP Inc. (HPQ) reported a 120% jump in earnings for the fourth quarter helped by a double-digit revenue growth in the PC and Printer divisions. The bottom line came in line with analysts’ expectations while the top line exceeded consensus estimates. The company issued guidance for the first quarter and full year 2019. Following this, the stock inched up over 3% in the after-market session.

Net income climbed 120% to $1.45 billion and earnings soared 133% to $0.91 per share. Adjusted earnings increased 23% to $0.54 per share. Revenue grew 10% to $15.37 billion.

Personal Systems division, which brings in a lion’s share to the company’s top line, continued its strong performance, improving sales by 11% to $10.1 billion. Meanwhile, the printing segment saw 9% growth over last year bringing in $5.3 billion to the top line.

Total hardware units were up 11% with Commercial hardware units showing huge year-over-year growth of 85% compared to the slight 3% rise in Consumer hardware units.

Looking ahead into the first quarter, HP expects its earnings in the range of $0.46 to $0.49 per share and adjusted earnings of $0.50 to $0.53 per share. For the full year 2019, HP predicts earnings in the range of $2.04 to $2.14 per share and adjusted earnings in the range of $2.12 to $2.22 per share.

For the fourth quarter, notebooks and workstations have contributed a double-digit revenue growth in the Personal Systems division while commercial hardware alone incurred a double-digit revenue growth in the Printing division.

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The company used $0.2 billion worth of cash for dividend payment of $0.1393 per share in the fourth quarter. HP utilized $0.6 billion of cash to repurchase about 24.4 million shares of common stock in the open market. As a result, HP returned 97% of its free cash flow to shareholders in the fourth quarter.

HP exited the fourth quarter with $5.9 billion in gross cash, which includes cash and cash equivalents and short-term investments of $0.7 billion included in other current assets. HP generated $0.8 billion of free cash flow in the fourth quarter.

Shares of HP ended Thursday’s regular trading session down 2.43% at $22.86 on the NYSE. The stock has risen over 8% in the year so far and over 6% in the past year.

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