HP Gives a Upbeat 2019 Profit Forecast on Strong PC Demand

(Bloomberg) -- HP Inc. gave an upbeat profit forecast for fiscal 2019, signaling that the world’s largest maker of personal computers will continue to see robust demand for its growing product lineup.

Profit, excluding certain items, will be $2.12 a share to $2.22 a share in the year that ends next October, the Palo Alto, California-based company said Wednesday in a statement. Analysts on average projected $2.15 a share, according to data compiled by Bloomberg. The shares gained about 3 percent in extended trading after closing at $26.06.

The technology giant has climbed to the top of the PC market under Chief Executive Officer Dion Weisler by overhauling its product portfolio. PC shipments gained 1.4 percent in the second quarter after years of decline, according to market researcher Gartner Inc. HP also has focused on cutting costs as part of a restructuring that started in fiscal 2017. As part of the effort, the company said in June that 4,500 to 5,000 employees will have been let go by the end of fiscal 2019.

“Our goal is to outgrow our respective markets,” Steve Fieler, the company’s chief financial officer, said at a meeting with analysts in New York. “For revenue we expect to continue being market leaders.” The company didn’t provide a sales forecast.

HP said it will increase its quarterly dividend 15 percent through the year and anticipates free cash flow of at least $3.7 billion.

HP has sought to make its printer division a key part of its plan to boost margins and now targets more business customers after buying Samsung’s printer unit. The unit will have an operating margin of at least 16 percent next year, Fieler said. HP has also offered more subscription services to bolster its recurring revenue and pad profits.

To contact the reporter on this story: Nico Grant in San Francisco at ngrant20@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew Pollack

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