Personal computer and printer maker HP saw its stock rise on Wednesday after it beat Wall Street's targets for its fiscal second quarter on continued strong PC sales. It also guided higher for the current quarter and full year. HPQ stock approached a buy point on the news.
The Palo Alto, Calif.-based company late Tuesday said it earned an adjusted $1.08 a share on sales of $16.49 billion in the quarter ended April 30. Analysts polled by FactSet expected HP earnings of $1.05 a share on sales of $16.16 billion. On a year-over-year basis, HP earnings rose 16% while sales increased 4%.
For the current quarter, HP forecast adjusted earnings of $1.06 a share, based on the midpoint of its outlook. Analysts were predicting $1.02.
For the full fiscal year, HP is now predicting adjusted earnings of $4.31 a share vs. Wall Street's target of $4.25.
HPQ Stock Rises
On the stock market today, HPQ stock climbed 3.9% to close at 40.34. During the regular session Tuesday, HPQ stock rose 0.2% to 38.84.
"Our consistent performance in the face of a volatile macro environment gives us confidence in our plans to build a stronger HP," Chief Executive Enrique Lores said in a news release.
HP's PC sales in the second quarter rose 9% year over year to $11.5 billion. Commercial PC sales increased 18% while consumer sales decreased 6%. Notebook revenue climbed 3% while desktop revenue jumped 28%.
Meanwhile, printing hardware and supplies revenue dropped 7% to $5 billion.
HPQ Stock In Consolidation Pattern
HPQ stock has been consolidating for the past eight weeks with a buy point of 41.57, according to IBD MarketSmith charts. That buy point is 10 cents above the stock's all-time high of 41.47, reached on April 7, based on IBD trading principles.
HPQ stock notched its record high after conglomerate Berkshire Hathaway disclosed an 11.4% stake in the PC and printer maker. Berkshire's investment is a validation of HP's strategy and capital return program, analysts said.
At least four Wall Street firms raised their price targets on HPQ stock after the earnings report. However, three of those firms are neutral on the stock and one rates it a sell.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
