HP Inc has beaten Wall Street expectations after sales of PCs and printers helped the firm deliver strong first quarter results.
The good news has meant that HP has also raised its full year profit forecast, and shares in the company rose 5.3 percent to $22.53 (£16.13) in after hours trading.
This is despite the fact the PC industry has been stagnating for years now, but according to Gartner HP has grown its leading position in this sector, having overtaking Lenovo last year.
It has been a busy time for HP, which is the hardware-focused business formed out of the split of Hewlett-Packard back in 2015.
Last year it completed its acquisition of Samsung’s printer business, which helped drive a 13.7 percent rise in this division’s sales.
Indeed, the strong showing of both the printer and HP’s personal systems business (its main revenue generator), help the firm deliver a strong set of first quarter financials.
For the quarter ending 31 January, HP posted a net profit of $1.9bn (£1.4bn), up from $611m ($437m) in the same year-ago period.
There was equally good news of the sales side, as revenues rose to $14.5bn (£10.4bn) from $12.7bn (£9bn) a year earlier. Analysts had been expecting revenues of $13.49bn (£9.6bn), according to Thomson Reuters.
“We’re coming out of the gate strong in Q1, with double digit revenue and EPS growth year over year,” said Dion Weisler, President and CEO, HP Inc. “Our impressive results spanned all segments and all regions, reflecting our innovative product portfolio and global execution.”
After the corporate split in 2015, HP is made up of mostly hardware, whereas HPE contains the enterprise hardware, software and services divisions.
Despite this, it has been a good quarter for hardware.
HP’s personal systems business posted revenues of $9.4bn (£6.7bn) from $8.2bn (£5.9bn) a year ago.
Likewise, the printer business rose 13.7 percent to $5.1bn (£3.6bn) from $4.5bn (£3.2bn).
And analyst house Gartner believes that firms such as HP will be helped in the long run as PC buyers seek better quality and functionality rather than lower prices for their machines. A good example here is the popularity of HP’s MacBook Air-challenging Spectre 13 laptop.
This focus on quality will in turn increase average selling prices of PCs and should help profitability going forward.
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