HP sales beat estimates on work-at-home PC demand

HP Inc. reported quarterly revenue and profit that topped analysts’ estimates, buoyed by strong sales of personal computers and printers needed for remote work and study. The company gave a forecast that also handily beat Wall Street expectations, sending the stock higher.

Sales were $15.6 billion in the fiscal first quarter, the Palo Alto, California-based company said Thursday in a statement. That beat the average analyst estimate of about $15 billion, according to data compiled by Bloomberg. Excluding some items, profit was 92 cents a share, also ahead of Wall Street expectations.

The company forecast fiscal second-quarter profit, minus certain items, of 84 cents to 90 cents a share. That compares with an average analyst estimate of 61 cents. For the full fiscal year, profit will be between $3.15 and $3.25 a share, well ahead of current Wall Street estimates. HP shares rose 1.3% after the results.

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The lockdown had dented HP’s printing business as commercial customers left offices empty, but in the latest quarter a surge in consumer demand helped return that unit to growth.

Chief Executive Officer Enrique Lores said higher demand for computers and peripherals is sustainable because consumers have learned the importance of this technology during the pandemic. Later in the year, commercial demand will support orders as companies open up facilities and refresh their office hardware.

“We think that change is sustainable,” he said in an interview. “Covid has made technology more fundamental in all of our lives.”

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He also addressed chip shortages, saying “growth would be even stronger if we got more components.” A sudden and large increase in forecasts from HP for 2021 made it difficult for suppliers to respond in a timely manner Lores said, while noting that the company’s supply is sufficient to support its bullish outlook.

Revenue from Personal Systems, mostly computers, rose 7% to $10.6 billion. Sales to consumers jumped 34%, while revenue from to corporate customers decreased 6%. Printing revenue rose 7% to $5 billion.

As part of an effort to strengthen the diversity of its products, HP is spending $425 million to acquire HyperX, the gaming division of Kingston Technology Co.. HyperX makes accessories such as headsets, keyboards and microphones. HP already makes laptops for video game enthusiasts.

By Ian King