Earnings to match analysts’ estimates, says HP
SAN FRANCISCO: HP Inc, the world’s largest personal-computer (PC) maker, fell after projecting earnings in line with analysts’ expectations as it struggles with thin profit margins in its main business.
Profit excluding some items will be US$0.52 to US$0.55 a share in the current quarter, it said on Thursday. Analysts on average projected US$0.53, according to data compiled by Bloomberg.
HP shares lost more than three per cent in extended trade after closing at US$24.63 (RM101.22) in New York. The stock has risen 17 per cent this year.
Chief executive officer Dion Weisler has been working to increase sales and profit in a stagnant, low-margin industry after HP ’s separation from Hewlett Packard Enterprise Co.
It’s cutting as many as 5,000 workers by next year to lower costs, while revamping its product lineup and developing new ways of selling.
Pricier HP computers for gamers and businesses have propelled the company to the top of the PC industry, but that’s not a very profitable place to be.
The operating margin of the company’s Personal Systems division, which includes PCs, was 3.9 per cent in the fiscal third quarter.
“Expenses are going to be higher than what people were expecting,” said Anand Srinivasan, a Bloomberg Intelligence analyst.
PC rival Lenovo Group Ltd “is doing better now than before, so there may also be some more pricing pressure”.
Lenovo recently reported a 19 per cent jump in quarterly sales.
“We’ve done the hard work of taking cost out of the business while accelerating,” said Weisler. “Almost one in four machines worldwide has the HP logo on it. That means there are three more computers I can still go after.”
HP’s printing business performed better, notching a 16 per cent margin, with ink sales and services contributing.
The company projected fullyear cash flow of US$3.7 billion and raised its fiscal 2018 adjusted profit outlook to a range of US$2 to US$2.03 a share.
Profit in the most-recent period was US$0.52 a share, excluding certain items.