HP shares pop on earnings beat, which CEO credits to focus on PC hot spots
HP Inc. saw its shares rise more than 3 percent after hours, amid better-than-expected quarterly results boosted by "pockets of growth" in the PC market.
The enterprise technology company posted adjusted earnings of 40 cents per share, excluding items, on revenues of $12.39 billion in the second fiscal quarter. Analysts polled by Thomson Reuters had expected earnings of 39 cents per share on revenues of $11.93 billion.
The company called it a "breakthrough quarter," as both the personal systems and print businesses both grew for the first time since 2010. Revenue was up 7 percent from a year ago, while adjusted earnings fell 2 percent from the year-ago period.
CEO Dion Weisler told CNBC that the company was staying ahead of the competition by mapping out the hot spots for PC growth.
"The real trick in this business is to segment the market, segment again and when you've done that do it one more time," Weisler said. "Figure out where the pockets of growth are going to be, where the heat map is going to take you. We've been looking at areas of premium and gaming – very attractive parts of the market as services."
The company faces some challenges, as prices have been rising for certain components, and there's been increased pressure from newer competition like Huawei in China. But Weisler said the company is experienced with managing those headwinds.
"I think about all competition a lot. I don't get distracted by it," Weisler said. "I think we've been very clear on how we can add value to our customers and we're executing on that strategy and it's working for us. .... There's been a lot of players in this market for a long time. We will compete against them as we do all of our competitors and that's by playing our own game."
HP Inc. was created from the 2015 split of Hewlett-Packard, and sells hardware like PCs and printers. The other company that emerged from the split, HP Enterprise, focuses on enterprise software and services.
— Reporting by CNBC's Josh Lipton
