HP earnings fall on 'tough' PC and printer markets
HP Inc. reported quarterly earnings that met analysts' expectations on Wednesday, but revenues in its printing and personal systems segments fell slightly more than Wall Street had estimated.
The company posted fiscal first-quarter adjusted earnings per share of 36 cents on $12.25 billion in revenue. Analysts had expected HP to report earnings of about 36 cents per share on $12.2 billion in revenue, according to a consensus estimate from Thomson Reuters.
HP shares wavered in after-hours trading after the announcement.
HP said its $12.25 billion in revenue represented a nearly 12 percent decline from $13.86 billion in the comparable year-ago period. Similarly, the company said its earnings fell 12 percent from 41 cents per share during the first quarter of fiscal 2015.
Looking ahead, the company said it expects fiscal second-quarter adjusted earnings between 35 and 40 cents per share. That compares to Wall Street's average expectation of 39 cents.
Although the company saw cash flow for the quarter below its expectations, Dion Weisler, HP's president and CEO, said on the company's earnings call that it has "taken immediate actions to stay on track to deliver our full year commitment."
"We have a clear strategy that leverages our strengths, and we are focused on execution, taking cost out of the business and delivering innovations that will amaze our customers and partners," Weisler said in a release. "Although we have some tough quarters ahead, I am confident in the future."
Revenue for the printing segment of the company came in at $4.64 billion in the quarter. Analysts had on average expected $4.84 billion, according to StreetAccount.
Personal systems, meanwhile, brought in $7.47 billion in revenue, compared to an anticipated $7.57 billion, according to StreetAccount.
Weisler told CNBC the company is "pleased" with the performance of its personal systems segment, and that it is "operating from a position of strength."
Still, PCs are facing "tough market conditions," he said, adding that HP hasn't seen stimulated demand from the Windows 10 operating system.
Printers are also seeing "tough" conditions, but the company is adapting with "innovative technologies," Weisler said.
Weisler told CNBC he will be accelerating the company's restructuring program, meaning 3,000 layoffs this year.
Wednesday's report marked the first time HP announced financial results separately from Hewlett Packard Enterprise — the other half of the company formerly known as Hewlett-Packard. HP sells personal computers and printers, while Hewlett Packard Enterprise sells commercial computer systems, software and tech services.
As such, Wall Street is looking at Wednesday's report for insight into how HP's hardware businesses are faring.
HP's stock has fallen about 8 percent since the beginning of the year.