PALO ALTO — HP. on Wednesday reported quarterly sales that were better than expected but still fell almost 4 percent from a year ago, a sign that stability remains uncertain for the company’s main personal computer and printing technology businesses.
HP said that for its fiscal third quarter, which ended July 31, sales of personal computers were flat from a year ago at $7.5 billion. Printing revenue dropped by 14 percent, to $4.4 billion from $5.2 billion in the third quarter of 2015.
On a conference call to discuss HP’s results, Chief Executive Dion Weisler said the company’s main markets were “remaining challenging and somewhat volatile” but that the company was investing in the “right opportunities” to set HP on a path toward continued success.
“We are seeing the benefits of our restructuring efforts,” Weisler said. “We believe overall revenue declines would moderate in the second half of the year.”
While its PC sales appeared to show little to get excited about, some industry analysts said the company’s PC business was heading in the right direction.
“The Windows PC remains an important tool for professionals,” said analyst Glenn O’Donnell, of Forrester. “(Overall sales) numbers are down, but some companies are showing growth.”
While HP’s PC sales were essentially the same as in the company’s fiscal quarter a year ago, HP has managed to gain some ground in worldwide PC sales. Gartner said that during the three months of April, May and June, HP’s worldwide PC shipments rose almost 2 percent from a year ago, to 12.3 million units, good enough for a 19.1 market share and second place behind Lenovo.
It was the third quarterly report for HP as an independent company since Hewlett-Packard split into two in November 2015. Hewlett-Packard Enterprise, which announces its quarterly earnings Sept. 7, took over responsibility for the old HP’s servers, services, software and high-end computing businesses.
Along with the flat PC sales and a decline in printing revenue, HP reported a quarterly profit of 49 cents a share, on revenue of $11.9 billion, compared with earnings of 39 cents a share on $12.4 billion in sales a year ago. Excluding one-time items, HP’s earnings from continuing operations came in at 48 cents a share, which topped the 44-cents-a-share estimate from analysts surveyed by Thomson Reuters. HP also surpassed analysts’ forecasts of $11.5 billion in revenue for the quarter. But HP hinted that the business might remain challenged for the next few months.
Reaction to HP’s report was initially negative, as the company forecast earnings from continuing operations of 34 cents to 37 cents a share, which fell below analysts’ estimates of 41 cents a share.
“Printing (in the third quarter) was weak as expected,” said Shannon Cross, of Cross Research. “The company is guiding down for its fourth quarter, implying that any upside from this quarter may not be repeatable. Either PCs will slow down, or the (profit) margin in printers is going to be lower than expected.”
That outlook, along the third-quarter revenue decline, helped to pull down HP’s shares by almost 5 percent, to $13.70, in after-hours trading. For the year, HP shares have risen more than 15 percent.