HP Inc (NYSE:HPQ) posts better than expected results for the fourth quarter

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HP Inc (NYSE:HPQ) stock rose 10.59% (As on Nov 24, 11:18:52 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY 21. The company’s profit totaled $3.1 billion for the fourth quarter of FY 21 compared with $0.7 billion in last year’s fourth quarter. The $4.2 billion of free cash flow was consistent with the full year guidance and adjusting for the net Oracle litigation proceeds and the company returned a record $7.2 billion to shareholders. The supply chain constraints continue to impact both Print and Personal Systems revenue and this was particularly impactful to the print hardware results this quarter. Gross margin was 19.6% in the quarter, up 2 points year-on-year. The increase was mainly driven by continued favorable pricing including currency, partially offset by higher costs. Non-GAAP operating expenses were $1.9 billion or 11.5% of revenue. The increase in operating expenses was primarily driven by increased investments in go-to-market and innovation.

Moreover, In Q4, Personal Systems revenue was $11.8 billion, up 13% year-on-year. Total units were down 9% given the expected supply chain challenges and lower chrome mix. The revenue growth is driven by the strength of demand and positive impact of the big shift toward mainstream and premium commercial. Consumer revenue was down 3% and commercial was up 25%. By product category, revenue was up 13% for notebooks, 11% for desktops and 39% for workstations. The company also continues to drive double-digit growth across peripherals and services. Personal Systems delivered $764 billion in operating profit with operating margins of 6.5%. The margin improved 1.4 points, primarily due to continued favorable pricing, product mix and currency, partially offset by higher cost including commodity costs and investments in innovation and go-to-market. Q4 total print revenue with $4.9 billion, up 1%, driven by favorable pricing in hardware and growth in services, partially offset by a decline in supplies. Total hardware units declined 26% due to consumer replenishment last year in Q4 and increased manufacturing and component constraints.

HPQ in the fourth quarter of FY 21 has reported the adjusted earnings per share of 94 cents, beating the analysts’ estimates for the adjusted earnings per share of 88 cents. The company had reported the adjusted revenue growth of 9.2 percent to $16.68 billion in the fourth quarter of FY 21, beating the analysts’ estimates for revenue of $15.42 billion. Regionally, in constant currency: Americas declined 4%, EMEA increased 15% and APJ increased 18%.

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