On Thursday, HP Inc. posted revenue and profit for the first quarter that beat expectations on Wall Street as it sold more PCs and printers, which helped the company increase its profit forecast for the full year.
Shares of HP, which consists of the hardware business of its predecessor Hewlett-Packard Co., were up by 5.3% after the closing bell.
The company announced that it expects its earnings per share for fiscal 2018 to be between $1.90 and $2.00, which is up from its previous estimate of between $1.75 and $1.85. The number was higher than estimates on Wall Street of $1.81 a share.
HP Inc.’s business of personal systems, which represent close to two-thirds of its total revenue, increased by close to 15% to end the quarter at $9.44 billion, which beat estimates on Wall Street of just over $8.50 billion.
Despite the PC market shrinking in the U.S., the company was able to continue increasing its market share, after beating out Lenovo Group in 2017 for the No. 1 spot worldwide, according to Gartner Inc. the research firm.
Moving forward, companies like HP Inc. should be benefactors of demand for better quality PCs. A report by Gartner said that PC buyers are going to be looking for functionality and quality rather than low prices, which will help to increase the average sales prices for PCs and will improve the profitability long term.
The company, based in Palo Alto, California, completed its acquisition of the printer business of Samsung Electronics last year and announced that revenue from the printer business increased by 13.7% to over $5.08 billion, which was above expectations of more than $4.76 billion.
HP Inc.’s net earnings were up ending at $1.94 billion equal to $1.16 a share, for the quarter in comparison to $611 million equal to 36 cents a share for the same period one year ago, benefiting from a one-off tax gain of just over $1.03 billion.
Revenue for the company was up 14.5% ending the quarter at $14.52 billion. Excluding certain items, the company had earnings of 48 cents a share, while analysts expected 42 cents a share on revenue of $13.49 billion.
While the smartphone market continues to grow, the tablets market has dropped considerably and the PC market has struggled for the last five to seven years, but seems to be leveling off over the last 12 to 18 months.