PC and printer maker HP late Tuesday edged above Wall Street's targets for its fiscal fourth quarter but missed with its earnings guidance for the current quarter and full year ahead. However, HPQ stock rose after the company announced a restructuring plan to improve operations.
The Palo Alto, Calif.-based company earned an adjusted 85 cents a share on sales of $14.8 billion in the quarter ended Oct. 31. Analysts polled by FactSet had expected HP earnings of 84 cents a share on sales of $14.69 billion. On a year-over-year basis, HP earnings sank 10% while sales dropped 11%.
HP's PC sales fell 13% year over year to $10.3 billion in the fiscal fourth quarter. Meanwhile, sales of printers and supplies declined 7% to $4.5 billion.
For its current fiscal first quarter, HP predicted adjusted earnings of 70 to 80 cents a share. The midpoint of 75 cents missed Wall Street's target of 86 cents.
For the full fiscal 2023, HP forecast adjusted earnings of $3.20 to $3.60 a share. The midpoint of $3.40 is below the analyst estimate of $3.54.
HPQ Stock Rises After Report
In after-hours trading on the stock market today, HPQ stock rose 1.5% to 29.83. During the regular session Tuesday, HPQ stock advanced 0.8% to close at 29.38.
"We had a solid end to our fiscal year despite navigating a volatile macro-environment and softening demand in the second half," Chief Executive Enrique Lores said in a news release.
He added, "Looking forward, the new Future Ready strategy we introduced this quarter will enable us to better serve our customers and drive long-term value creation by reducing our costs and reinvesting in key growth initiatives to position our business for the future."
HP said its Future Ready Transformation plan will drive "significant structural cost savings through digital transformation, portfolio optimization and operational efficiency." The company plans to reduce its global workforce by 4,000 to 6,000 employees, or up to 10% of its current staffing, by the end of fiscal 2025.
HPQ stock ranks third out of 13 stocks in IBD's computer hardware and peripherals industry group, according to IBD Stock Checkup. But it has a middle-of-the-road IBD Composite Rating of 52 out of 99.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
