HP Inc. (NYSE: HPQ) reported better-than-expected earnings for the third quarter of 2019 while revenues were in line with estimates.
The company also announced that its President and CEO Dion Weisler has decided to step down from his role due to a family health matter. Enrique Lores, who is currently President of HP’s Imaging, Printing and Solutions business, has been appointed as the new President and CEO effective November 1, 2019. Weisler will remain with HP through January 2020 to ensure a smooth transition.
Shares tumbled 5% in aftermarket hours on Thursday.
Net revenue of $14.6 billion was relatively flat compared to the same period last year, and in line with estimates. Sales grew 2% in constant currency.
On a GAAP basis, net income rose 34% to $1.2 billion while EPS grew 44% to $0.78. Adjusted net income increased 4.8% to $880 million while EPS improved 11.5% to $0.58. Analysts had forecast adjusted EPS of $0.55.
During the quarter, Personal Systems net revenue grew 3% year-over-year on a reported basis and 6% in constant currency. Commercial net revenue rose 10% while Consumer net revenue fell 11%. Total units increased 5% with a 2% increase in Notebook units and an 11% growth in Desktop units.
Printing net revenue declined 5% year-over-year both on a reported basis and in constant currency. Total hardware units decreased 9%, with a 4% decline in Commercial hardware units and a 10% drop in Consumer hardware units. Supplies net revenue was down 7% both on a reported and constant currency basis.
For the fourth quarter of 2019, HP estimates GAAP EPS to be $0.51-0.55 and adjusted EPS to be $0.55-0.59. For fiscal-year 2019, HP raised its outlook for GAAP EPS to a range of $2.31-2.35 and adjusted EPS to a range of $2.18-2.22. This compares to the previous ranges for GAAP EPS of $2.04-2.11 and adjusted EPS of $2.14-2.21.