HP Inc., delivered an in-line fourth quarter that featured a 4 percent PC sales gain from a year ago, as its printing business continued to struggle with revenue falling 8 percent.
The company, which reported at the same time as its other half, Hewlett Packard Enterprise, saw strong gains in its notebook business, with desktops gaining 2 percent in the fourth quarter. HP, however, took a hit on consumer printers and supply revenue.
HP reported fourth quarter earnings of $500 million, or 30 cents a share, on revenue of $12.5 billion, up 2 percent from a year ago. Non-GAAP earnings were 36 cents a share. Wall Street was expecting fourth quarter earnings of 36 cents a share on revenue of $11.9 billion.
For fiscal 2016, HP delivered net income of $2.7 billion, or $1.53 a share, on revenue of $48.2 billion, down 6 percent from a year ago. In a statement, CEO Dion Weisler said the company executed on its strategy to focus on its core.
Patrick Moorhead, principal of Moor Insights & Strategy, gave his take on HP's earnings:
HP Inc. surprised many with their increased revenues driven by PCs during a rough time in both the PC and printer market. HP's premium PC and gaming strategy is starting to kick and and drove a lot of their 4 percent revenue increase for the quarter in a down market. Both consumer and commercial revenues were up, hard to do when you're profitable at 4.3 percent margin. Ink is HP's biggest short-term issue commercial units were up 10 percent and HP needs to get control of the knock-off ink cartridges. I like the printer pipeline driven by page wide array technology that helps them attack the laser market but also 3D printing. I still view HP as the 3D printing leader in 2017.
As for the outlook, HP projected first quarter non-GAAP earnings between 35 cents a share and 38 cents a share. Wall Street was expecting non-GAAP first quarter earnings of 38 cents a share. For fiscal 2017, HP said non-GAP earnings will be between $1.55 a share and $1.65 a share.
The results show that HP's PC business fared better in the fourth quarter than it had for the fiscal year. Here's the breakdown for the fourth quarter. In a nutshell, PCs were solid, and consumer printers and supplies took a hit.