HP stock tumbled late Tuesday despite the computer hardware company reporting fiscal fourth quarter earnings that met expectations and better-than-expected sales. The company's profit guidance was lower than expected.
HP said in a news release that it earned an adjusted 93 cents per share on sales of $14.05 billion, up 1.7% year-over-year, for the October-ended quarter. Analysts polled by FactSet projected the Palo Alto, Calif.-based company would post adjusted earnings of 93 cents per share on sales of $13.99 billion.
For the same period a year earlier, HP posted adjusted earnings of 90 cents per share on sales of $13.82 billion.
"We are pleased with our Q4 performance where we saw revenue growth for the second consecutive quarter, driven by steady progress in Personal Systems and Print," President and CEO Enrique Lores said in a news release.
For the current quarter, HP guided for adjusted earnings of 73 cents per share at the midpoint of its range. Analysts were projecting 85 cents per share adjusted earnings for the January-ending quarter, according to FactSet. HP said in a news release that its guidance excludes 13 cents per share "primarily related to restructuring and other charges."
On the stock market today, HP stock shed more than 7% to 36.09 in recent after-hours action.
HP Stock Up 30% This Year
Prior to earnings, HP stock fell a half-percent in regular Tuesday trading. Shares have gained 30.4% this year, helped by optimism that AI will help restart demand for PCs following an industry slump in 2022 and 2023. HP's previous July-ended quarter ended a streak of eight quarters where sales declined.
Coming into the report, HP stock had an IBD Composite Rating of 55 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, HP's IBD Relative Strength Rating was 81 out of 99. The RS Rating means that HP has outperformed 81% of all stocks in IBD's database over the past year.
HP stock broke out above a 39.52 consolidation pattern buy point on Monday but closed below that level Tuesday, according to MarketSurge.
