HPQ HP Inc

By Maria Armental 

An upswing in the personal-computer market helped HP Inc. more than double its profit in the latest quarter, and the company signaled strong growth in technology spending from corporate clients and consumers in 2019.

The printer and personal-computer giant, born from the 2015 split of Hewlett Packard, said its fourth-quarter profit was $1.45 billion, or 91 cents a share, compared with $660 million, or 39 cents a share, a year earlier.

On an adjusted basis, profit rose to 54 cents a share, from 44 cents a share a year earlier.

Revenue rose 10% to $15.34 billion. HP's personal-systems segment, which is the company's largest single segment and includes the PC business, rose 11%. The printing segment, which includes its lucrative supplies business, saw a stronger-than-expected 9% increase in revenue.

Shares in HP, which outperform the market with a 8.8% gain this year, were flat in after-hours trading.

Recent data from research firms International Data Corp. and Gartner Inc. have shown a recovery in the PC market this year, driven by Windows 10 hardware upgrades for corporate customers.

Gartner estimates overall IT spending to increase 3.2% in 2019 and the firm expects the current upgrade cycle to carry on into 2020. HP, which has been battling with Lenovo Group Ltd. to be the world's largest PC maker, has benefited from that recovery although it warned a processor shortage is expected to continue through the first half of the year.

Fellow PC maker Dell Technologies Inc. on Thursday reported a 15% revenue increase, including a 11% increase in its client solutions group, which includes sales of computers and notebooks.

Palo Alto, Calif.-based HP has also made key investments, including in 3-D printing, which executives see as a multitrillion-dollar global market, and the so-called A3 copier segment, boosted by its acquisition last year of Samsung Electronics Co.'s printer business. Those copiers typically handle larger paper used for posters and photographic prints.

HP has also been investing heavily in 3-D printing, which executives have said they see as a multitrillion-dollar global market.

"Our core growth and future strategy is working," Chief Executive Dion Weisler said during a conference call with analysts.

HP, whose results had been hit as the PC market shrunk, has now posted back-to-back years of revenue and profit growth.

In the most recent year, which ended Oct. 31, HP generated $4.2 billion in free cash flow, above its target of at least $3.7 billion. Free cash flow is typically seen as a measure of financial strength.

HP executives on Thursday affirmed the company's annual profit forecast for the current fiscal year of $2.04 and $2.14 a share, or $2.12 and $2.22 a share on an adjusted basis.

Asked about the potential impact from tariffs, given trade tensions between the U.S. and China, company executives said they had taken steps to mitigate the impact, including raising prices. The annual forecast factors in tariffs announced so far, they said, adding that China remains a strategically important market.

"We're not chasing ghosts," Mr. Weisler said during the earnings call. "But we're also not sticking our heads in the sand either.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

November 29, 2018 19:13 ET (00:13 GMT)

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