Shares of HP Inc. (NYSE: HPQ) fell nearly 6% during after hours trading on Tuesday, after the PC and printer maker reported a mixed fiscal fourth quarter. Its revenue for the period, which ended Oct. 31, rose 11% annually to $13.9 billion, beating expectations by $550 million. Its non-GAAP earnings rose 22% to $0.44, which matched its own forecast and analysts' expectations.

The key facts

HP's personal systems (PC) revenues rose 14% year over year, fueled by 11% growth in commercial revenues and 18% growth in consumer revenues. Total shipments climbed 6%, with notebook and desktop shipments rising 8% and 2%, respectively. The unit reported a 3.8% operating margin for the quarter. The growth of HP's PC business has been outpacing the rest of the industry -- which is still posting annual declines in shipments -- over the past few quarters.

Meanwhile, HP's printer revenues rose 7% year over year with a 16.6% operating margin. Total hardware revenues rose 3%, thanks to growth in consumer units; sales of commercial units were flat. Supplies revenue rose 11%.

HP expects its first quarter fiscal 2018 earnings to rise between 5% and 13%, and for its fiscal 2018 earnings to rise 6% to 13%. Both estimates were in-line with analyst forecasts. It also foresees its acquisition of Samsung's printing unit and new 3D printers (including next-gen metal printers) boosting its scale and market share across multiple printing markets.

The bottom line

HP's results were solid, but some investors might have been expecting better sales of commercial printers or a bigger bottom-line beat. Nonetheless, the stock remains up about 50% for the year, trades at a low 12 times next year's anticipated earnings, and pays a forward dividend yield of 2.5% -- so it's still a good income play for patient investors.

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The author(s) may have a position in any stocks mentioned.

 

 

Leo Sun owns shares of HP.

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