HP sales rise, but its profit may fall as printer sales shrink

The Boise campus shared by HP Inc. and Hewlett-Packard Enterprise.
The Boise campus shared by HP Inc. and Hewlett-Packard Enterprise. Katherine Jones / Idaho Statesma

HP Inc., which sells printers and computers, said Tuesday that sales rose in the latest quarter, and it reported profits that matched analysts’ expectations.

But HP said profit in the current quarter may fall, signaling that planned cost cuts will be needed to bolster earnings.

Profit from continuing operations, excluding some items, will be 35 cents to 38 cents a share in the quarter ending in January, HP said Tuesday in a statement. The midpoint would fall short of analysts’ projections of 38 cents, according to data compiled by Bloomberg.

Chief Executive Officer Dion Weisler is cutting costs while trying to invest in his main products, personal computers and printers, which customers are using less as they opt for smartphones, tablets and other portable devices. HP said last month that the company — which split with Hewlett Packard Enterprise at the end of 2015 — plans to cut as many as 4,000 employees over three years. That follows a round of roughly 3,000 reductions unveiled last year.

HP Inc. and Hewlett-Packard Enterprise are among the Treasure Valley's largest employers, with a shared campus at 11311 Chinden Boulevard in Boise. Before the split, HP employed nearly 4,000 people there.

“We obviously realize that the markets are still uncertain,” Weisler said during a briefing. “This team knows how to execute in both up and down markets.”

HP Inc. shares fell 0.9 percent in extended trading after closing at $15.95 in New York on Tuesday. The stock had gained 35 percent this year through the close.

The company reported profit, before certain items, of 36 cents a share in the fourth quarter ended Oct. 31, matching analysts’ estimates, according to data compiled by Bloomberg.

Sales rose 2 percent to $12.5 billion in the quarter, topping analysts’ estimates of $11.9 billion. Revenue for personal systems, which includes the computer lines, increased 4.2 percent to $8.02 billion from a year earlier. Commercial sales rose 3 percent, while the consumer business climbed 7 percent in the personal systems unit.

Still, printing revenue declined 8.2 percent to $4.6 billion, compared with a decline of 14 percent in the previous quarter. Consumer printing sales performed worse than the commercial business.

“We’re taking advantage of the parts of the market that are growing — for top-line growth — but also doing it in a very cost-effective way,” Chief Financial Officer Cathie Lesjak said in the briefing.

The Idaho Statesman contributed.