Computing powerhouse HP Inc. (HPQ) is starting to fire on all cylinders as businesses reopen from the COVID-19 pandemic.
Second quarter sales at HP’s personal systems and printing segments surged 27% and 28%, respectively, from the prior year, the company said in an earnings release Thursday evening. Operating profit margins in the personal systems segment rose 10 basis points from the prior year, and gained 470 basis points in the printing business.
Here is how HP performed versus Wall Street estimates for the second quarter:
Net Sales: $15.9 billion, up 27.3% year over year, vs. $14.88 billion estimate
Gross Margin: 21.67% vs. 20.90% estimate
Operating Profits: $1.44 billion vs. $1.38 billion estimate
Adjusted EPS: $0.93 vs. $0.89 estimate (company guidance: $0.84 to $0.90)
Investors will likely lock in on the performance of HP’s printer business, which has been hampered a bit during the pandemic as offices shut down and people worked from home.
Hardware units in HP’s printing business increased 42% in the second quarter, quicker than the 16% pace in the first quarter. Consumer printer units rose 45%, compared to a 34% increase in the first quarter. Commercial printer units improved 22% after dropping 6% in the first quarter.
HP president and CEO Enrique Lores told Yahoo Finance he is seeing a recovery in demand for office printers as workers return back to headquarters. Lores added HP has been able to successfully navigate the chip shortage by building up supplies.
Despite the earnings beat and upbeat guidance, HP shares turned 4% lower in after-hours trading on Thursday. Prior to the earnings report, HP shares were up about 30% year-to-date, according to Yahoo Finance Plus data. Shares of rival Dell are up 35% this year, while Xerox has only gained 3%.
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