| | | HP Sees Office Reopenings Lifting PC Demand Ahead of Promising Holiday Season
DOW JONES & COMPANY, INC. 4:08 PM ET 11/23/2021
Symbol Last Price Change | HPQ | 32.19 | +0.26 (+0.8143%) | | QUOTES AS OF 04:03:01 PM ET 11/23/2021 |
HP Inc. (HPQ) reported strong earnings and gave an upbeat outlook, aided by office reopenings and an expectation for healthy consumer demand through the holiday shopping season despite supply shortages.
The PC and printer maker said Tuesday it generated quarterly sales of $16.7 billion, up 9.3% from the year ago period, and $3.1 billion in net income, including a one-time $1.78 billion legal settlement. The results beat Wall Street expectations for both sales and earnings.
"We are seeing strong demand coming from the commercial side, from the office side because offices are reopening and companies are invested in creating a better experience for their employees," HP Chief Executive Enrique Lores told The Wall Street Journal.
Commercial PC revenue grew by 25%, the company said, while consumer PC sales retreated by 3%, from their lofty levels a year ago.
Demand shot up for computers during the pandemic as people scrambled to secure devices for tasks such as remote working and distance learning. The global PC market has grown for six consecutive quarters, according to International Data Corp. But the world-wide chip shortage and global supply chain problems have stopped sales from taking off even more.
The pandemic had a mixed effect on HP. Its PC business boomed and the sale of home printers also increased, though the widespread shutdown of offices, before they began to reopen, weighed on its ability to revitalize its important print-services business.
In the most recent quarter, HP ranked second in world-wide PC shipments, close behind Lenovo Group Ltd. and beating out Apple Inc. and Dell Technologies, according to IDC. But its shipments were down almost 6% from the previous year while nearly all the other top companies' shipments increased year-over-year. Mr. Lores said the company was able to deliver strong results in part by emphasizing shipments of more-lucrative models.
Supply constraints amid sustained demand are expected to continue into next year. "Demand -- at least for the first half -- will continue to outpace supply," HP Chief Financial Officer Marie Myers said.
Chip makers are pouring money into trying to alleviate the processor shortages. Taiwan Semiconductor Manufacturing Co., the world's leading contract chip maker, Samsung Electronics Co. and Intel all have unveiled big chip factory plans to boost manufacturing capacity in the coming years.
HP says it expects to generate per-share earnings of $0.92 to $0.98 in the current quarter and $3.86 to $4.06 for the full fiscal year ending Oct. 31, 2022, both ahead of Wall Street expectations.
The outlook, Mr. Lores said, is driven by "both sustained strong demand from the commercial side as we have seen this quarter but also by consumer demand being strong as we go through the holiday season."
Write to Meghan Bobrowsky at Meghan.Bobrowsky@wsj.com |
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