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HP Tops Wall Street Sales Estimates on Rising PC Demand

Nico Grant

(Bloomberg) -- HP Inc. reported quarterly revenue and profit that beat analysts’ estimates, signaling the personal computer maker has benefited from a swell of demand from remote workers and students during the pandemic.

Sales came in at $14.3 billion in the period ended July 31, the Palo Alto, California-based company said Thursday in a statement. Analysts, on average, projected $13.3 billion, according to data compiled by Bloomberg. Excluding some items, profit was 49 cents a share, beating estimates of 43 cents.

The company also projected that profit in the fiscal fourth quarter will be 50 cents to 54 cents a share. Analysts were looking for 50 cents. HP shares rose about 3% in extended trading after the results.

Free from a hostile takeover attempt by Xerox Holdings Inc., HP Chief Executive Officer Enrique Lores has tried to navigate through the pandemic, first by resolving manufacturing challenges so the company could meet PC demand from students and workers forced to stay home. With corporate offices empty, HP’s commercial printing business has cratered, but the company has used ink subscriptions to support printing revenue. That service that will soon have 8 million subscribers.

The company’s notebooks that have proved “essential,” Lores said in an interview. “Rather than having one PC per home, it’s having one PC per person,” the CEO added. “We shipped 18 million PCs, the highest PCs we have ever shipped in a quarter.”

Revenue from Personal Systems, mostly computers, climbed 7% to $10.4 billion. Revenue from consumers jumped 42% while business sales declined 6%. Printing revenue dropped 20% to $3.9 billion.

HP projected free cash flow in fiscal 2020 will total $2.5 billion to $3 billion.

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