HP Inc.'s stock was up 12% in extended trading Tuesday after the iconic computing giant reported a jump in personal computer sales and overall revenue, but acknowledged component shortages will continue through the first half of 2022.
HP HPQ chief executive Enrique Lores told MarketWatch in an interview before the results were announced, but component constraints will remain an issue the next few quarters, but HP s ability to mix and match parts was reflected in a stronger than expected quarter. He said that our exceptional sales were a reflection of our actions.
HP reported fourth quarter net earnings of $3.1 billion, or $2.71 a share, compared with net earnings of $668 million, or 49 cents a share, in the year-ago quarter. HP, which provided a outlook of 82 cents to 88 cents a share for the fourth quarter, offered guidance of 92 cents to 98 cents a share for its current first quarter, in line with analysts projections.
Analysts surveyed by FactSet had anticipated net income of 88 cents a share on revenue of $15.39 billion in the fourth quarter.
The PCs and laptops sales of HP made up a large chunk of revenue, at $11.8 billion, up 13% from the same quarter a year ago. The performance blew past the estimates of analysts polled by FactSet. They had predicted $10.5 billion. HP's focus on higher-end personal systems made up for a decrease in consumer sales.
Printer revenue was relatively flat at $4.9 billion.
The equivalent of a quarter of goods is an issue, with backlog being an issue. Dog makers of consumer electronics, among others, are affected by a nationwide supply-chain issue.
While generally applauding HP's fourth quarter performance, Futurum Research principal analyst Daniel Newman offered a mixed report card. The company has executed well, delivered revenue and margin acceleration and has managed supply constraints fairly well, through one lens, Newman said. The company has lagged market-share leads like Dell DELL and Lenovo 992, which have grown faster and seemed to have more success dealing with the macroeconomic headwinds through another lens. HP's stock has gone up 31% this year, while the S&P 500 index SPX has gone up 25% in 2021. Tuesday s after-hours jump was HP's first double-digit gain in three years.
AB Bernstein analyst Toni Sacconaghi Jr. had plenty of pointed questions in a Nov. 16 note that was ominously titled Ball and Supply Chain, leading into HP's quarterly results. He wrote: WHEN will HP s availability of product improve? 3 Can HP's elevated corporate PC backlog offset any weakness in Chromebooks Consumer PCs? Can printing grow on an ongoing basis, and 5 What are normalized printing operating margins given that high-margin supplies are likely to decline at low to mid-single digit rates going forward?