HP Inc., the one that produces workstations, printers, ink and other IT hardware, reported its Q3 2017 earnings Aug. 23, and they beat Wall Street expectations. So there was cause for celebration of sorts in Palo Alto.
Revenue increased by double digits for the first time in a long while; however, profits slipped noticeably from a year ago.
As often happens, investors took advantage of the news and went into a sell mode, sending shares on the Nasdaq index down about 3 percent (to $18.21) in the extended session after the market closed.
The veteran computer and printer manufacturer's net income fell to $696 million, or 41 cents a share, compared to $783 million, or 45 cents a share, in the year-ago period. Revenue increased 10 percent to $13.1 billion from $11.89 billion in the year-ago period.
Analysts surveyed by FactSet had estimated adjusted earnings of 42 cents a share on revenue of $12.3 billion. Executives issued fourth-quarter adjusted earnings guidance of 42 cents to 45 cents per share.
The company's Personal Systems division (PCs, laptops, mobile devices) brought in revenues of $8.404 billion, up 12 percent year over year. Commercial revenues increased 11 percent, while consumer revenues were up 14 percent. The company saw a 7 percent rise in total shipments, driven by a 12 percent increase in notebook unit shipment.
Desktop shipments and workstations were down 3 percent on a year-over-year basis.
Printing revenues were up 6 percent year over year to $4.698 billion, primarily due to a 10 percent increase in supplies revenues. HP's total hardware unit sales went up 1 percent due to an increase of 1 percent in consumer hardware units. Commercial hardware units, however, remained flat on a year-over-year basis.
Regionally, revenues from Americas were up 8 percent year over year. EMEA revenues grew 14 percent, while the Asia Pacific and Japan region increased 15 percent year over year, all in constant currency.