HP beats Q3 estimates with big increase in notebook sales

With the COVID-19 pandemic driving up demand for notebooks, HP said notebook shipments grew by 32 percent year-over-year, accounting for more than half of its Q2 revenue.

HP on Thursday reported better-than-expected third quarter financial results, with strong notebook sales driven by the growing number of students and workers staying productive remotely through the pandemic. The total number of notebooks shipped in the quarter grew by 32 percent year-over-year, the company said. More than half of HP's revenue for the quarter came from notebooks.

HP's non-GAAP diluted net earnings per share came to 49 cents on revenue of $14.3 billion, down 2.1 percent from the prior-year period.

Analysts were expecting earnings of 43 cents per share on revenue of $13.31 billion. 

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"Our strong Q3 results and solid beat for the quarter, in the face of unprecedented uncertainty, reflects the agility of our teams and the strength of our portfolio," CEO Enrique Lores said in a statement. "We're leveraging our leadership across consumer and commercial markets to capitalize on opportunities - from the essential role of the PC in an era of remote work and school to the rise of subscription-based business models to enable greater flexibility. Our diverse portfolio and disciplined execution are powering our performance and we're well positioned to drive continued value creation."

Overall Personal Systems revenue came to $10.36 billion, up 7 percent year-over-year. Within that segment, commercial net revenue decreased 6 percent and consumer net revenue increased 42 percent. Notebook revenue was up 30 percent to $7.3 billion, while desktop revenue was down 29 percent to $2.2 billion. Workstation revenue came to $428 million, down 30 percent, while "other" revenue within Personal Systems was up 20 percent to $407 million. 

Total units shipped were up 11 percent, with notebooks units up 32 percent and desktops units down 30 percent.

HP's other business segment, Printing, saw revenue decline 20 percent year-over-year to $3.93 billion. Commercial hardware revenue took a big hit, declining 37 percent to $732 million. Commercial hardware revenue grew 7 percent to $628 million. Supplies net revenue was down 19 percent to $2.57 billion. 

Total hardware units were down 2 percent, with Commercial hardware units down 32 percent and Consumer hardware units up 3 percent. 

For the fourth quarter, HP expects a non-GAAP diluted net EPS to be in the range of 50 cents to 54 cents.