Pandemic, holiday sales pump up HP with $1 billion jump in sales

Americans continue to upgrade home systems to larger monitors, headsets, fancy mouses and more

HP Inc. shares spiked 4% Thursday after the computer maker released holiday earnings earlier than expected and showed a $1 billion jump in quarterly sales.

The company reported net earnings of $1.1 billion, or 92 cents a share, compared with net earnings of $700 million, or 46 cents a share, in the year-ago quarter. Revenue improved to $15.6 billion from $14.6 billion a year ago. Analysts surveyed by FactSet had expected earnings of 66 cents a share on revenue of $15 billion.

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“The strength of our portfolio and diversity of our businesses is driving our performance and positioning HP well for the future,” HP Chief Executive Enrique Lores said in a statement. HP had previously provided guidance of between 58 cents and 64 per cents a share.

Ticker Security Last Change Change %
HPQ HP, INC. 33.96 +0.34 +1.01%

Personal Systems’ net revenue was up 7% to $10.6 billion, while printing net revenue was $5.0 billion, also up 7% year over year. HP also said it returned $1.6 billion to shareholders in share repurchases and dividends.

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Marie Myers, who was named Chief Financial Officer last week after serving as acting CFO and Chief Transformation Officer since October 2020, offered guidance of adjusted second-quarter earnings of between 84 cents and 90 cents a share. FactSet is predicting 61 cents a share.

The COVID-19 pandemic has seemed to spark a renaissance of the PC market, dovetailing with a spike in gaming and in-home entertainment. Americans increasingly have upgraded their home systems to larger monitors, headsets, fancy mouses and other peripherals to play games and watch content, goosing the market and prompting HP to announce the acquisition of peripherals maker HyperX for $425 million on Wednesday.

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HP estimates the world-wide market for peripherals is expected to grow to $12.2 billion by 2024, and gaming accounts for 37% of the U.S. peripherals market, and 53% in China.

The report was released about an hour before trading closed on Thursday, when it was scheduled to be released after the bell. HP shares have ascended 26% over the last 12 months. The broader S&P 500 index SPX has improved 30% in the past year.