HP (HPQ 16.60, +0.40) is higher by 2.5% in pre-market after the company reported a slim earnings beat.
The established tech company reported above-consensus first quarter earnings of $0.38 per share on a 3.6% year-over-year increase in revenue to $12.68 billion, which was also ahead of expectations.
HP fell out of favor a few years ago, but its struggles have not gone unaddressed by the management. Shares of HP hit a nine-year low in 2012 ($5.15), which prompted some reorganization of the company's business. The stock has tripled in value since the 2012 low, but it remains below its 2014 peak ($18.66) and well below its record high from early 2000 ($35.42).
This was the second consecutive quarterly report in which HP reported year-over-year revenue growth after 17 of the previous 18 reports showed year-over-year declines on the top line.
The company realized solid year-over-year sales growth in most of its segments while the printing segment remained under pressure. Total printing revenue fell 3.0% year-over-year to $4.48 billion with commercial hardware sales falling 8.0% to $886 million and supplies revenue declining 3.0% to $3.01 billion. Consumer hardware sales in the printing segment ticked up 2.0% year-over-year to $590 million.
On the flip side, total Personal Systems revenue grew 10.0% to $8.22 billion. The increase was paced by a 16.0% year-over-year jump in sales of Notebooks ($4.89 billion). Workstation sales increased 11.0% to $491 million while other Personal Systems revenue grew 6.0% to $309 million. Desktops revenue was little changed, coming in at $2.53 billion.
HP's operating margin in the Personal Systems segment improved 70 basis points to 3.8% while Printing operating margin declined 100 basis points to 16.0%.
Looking ahead, the company expects second quarter earnings between $0.37 and $0.40 per share, which is close to current market expectations. For the full year, the company has maintained its outlook for earnings between $1.55 and $1.65 per share.