HPQ Continues To Outperform The PC and Printing Industry

by Trefis Team
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HP Inc. (NYSE:HPQ) announced its fiscal Q4 results on Tuesday, November 21.  The results were in line with our expectations, as both the Personal Systems and Printing divisions reported growth in revenues and improvements in both market share and product mix.

We have a price estimate of $18 per share for HPQ, which is around 15% below its current market price.

See Our Complete Analysis For HPQ Here

Below are the key takeaways from the results, which can also be viewed in our dashboard format here.

For the quarter, the company’s revenues grew by 11% to $13.9 billion. The company also reported non-GAAP diluted net EPS of $0.44, which was at the higher end of its guidance range. The operating profit margin declined by 80 basis point y-o-y to 8.1% in Q4’17.

 

The company reported that its worldwide share in the PC market improved by 1.2% y-o-y to 22.5% on the back of new launches for the premium consumer PC market, which includes Spectre 2 and the new line of Omen X gaming laptops. As a result, its Personal System revenues grew by 13% y-o-y to $9.08 billion, with 6% growth in total units shipped. Furthermore, the company stated that the margins for the personal systems division improved sequentially, though component costs (shortage of NAND flash is driving costs higher) continued to impact profitability. Within the Personal Systems division, Notebooks revenue grew by 16% y-o-y as unit sales improved by 8% y-o-y, while desktops revenue grew by 10% as unit sales grew by 2% y-o-y.

The Printer division reported another quarter of growth, as revenues grew by 7% y-o-y to $4.88 billion, driven by improving sales of both supplies and hardware. HPQ’s share in printer hardware market improved to 40%. While hardware unit sales increased by 3%, supplies revenues grew by 10%.

EPS Outlook For Q1 2018

For fiscal Q1, HP estimates GAAP diluted net EPS from continuing operations to be in the range of $0.38 to $0.42, and non-GAAP diluted net EPS to be in the range of $0.40 to $0.43.

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