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HP reports strong Q2 as sales up 13 percent

HP is posting double-digit sales gains as it hones its PC and printer execution and gains commercial momentum.

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HP continues to fare well in a rocky PC market as it grabs share and posts double-digit growth.

The company reported fiscal second quarter earnings of $1.1 billion, or 64 cents a share, on revenue of $14 billion, up 13 percent from a year ago. Non-GAAP earnings for the quarter were 48 cents a share.

Wall Street was expecting HP to report second quarter non-GAAP earnings of 48 cents a share on revenue of $13.57 billion.

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HP's non-GAAP results exclude restructuring, acquisitions and other charges as well as a tax gain.

CEO Dion Weisler said the company is focused on innovation and operational efficiencies. The company generated $937 million of free cash flow in the second quarter. The company is the top PC maker, according to IDC data.

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By unit, personal systems revenue was up 14 percent in the second quarter with commercial revenue up 16 percent and consumer up 10 percent. Printing revenue was up 11 percent from a year ago in the second quarter with commercial gains driving the business. Supplies revenue in the second quarter was up 8 percent. The printing unit got a boost from the acquisition of Samsung's printer unit.

By the numbers:

  • Notebook revenue was up 15 percent from a year ago with units up 7 percent. That stat indicates that HP was able to boost average selling prices in the second quarter.
  • Desktop revenue was up 16 percent in the second quarter with units up 7 percent.
  • Commercial revenue was 23 percent of the printer unit's sales in the second quarter with consumer at 12 percent. Supplies are 65 percent of revenue.
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As for the outlook, HP is projecting non-GAAP earnings of 49 cents a share to 52 cents a share. For fiscal 2018, HP is projecting non-GAAP earnings of $1.97 a share to $2.02 a share.

Separately, HP named Steve Fieler CFO replacing Cathie Lesjak, who will become interim chief operating officer. Lesjak will be operating chief until her retirement in early 2019. Fieler is a 11-year HP veteran.