Hewlett-Packard Company or HP Inc reported its third-quarter 2020 earnings on 27th August 2020. Revenue was down 2.1% year-on-year from $14.6 billion in Q32019 to $14.3 billion in Q32020. Operating margins softened from 7.4% in the third quarter of 2019 to 5.4% in the third quarter of 2020. Diluted GAAP EPS was $0.52 per share, 33.3% lower than $0.78 in net earnings during Q32019. However, earnings at net income were both comfortably above analyst estimates.
HP Laptop sales are keeping the company going
One unexpected benefit of the pandemic for HP has been the boom in PC sales. As people spend more time at home, they work and attend meetings via devices like laptops. HP Inc CEO Enrique Lores said, “We continue to advance our leadership in Personal Systems and Print. In Personal Systems, we delivered growth in revenue, profit and share, and we delivered record unit shipments in Q3. The PC is more central to daily life than ever and PC use is up more than 20% since COVID emerged. We are empowering remote workers and students with the ultimate office and learning experiences at home.”
HP Printer segment had pluses and minuses
HP Printer business also experienced a good performance in Q32020. Working and studying from home has led to greater use of home printing. The company saw an increase in ink usage as well. HP had started an Instant Ink subscription business which saw double-digit subscriber growth during the third quarter of 2020. The gains in home printing were offset by a decline in commercial printing. In fact, company CFO Steve Fieler said that HP had anticipated a challenging quarter due to the impact of the pandemic on HP’s commercial printing business. Overall, print revenue was down 20% to $3.9 billion.
HP Inc’s stock is stabilizing
Hp Inc stock is down 7.36% year-to-date. However, since the March market crash, the stock has almost 47% and seems to be stabilizing. The stock has more or less ranged in the $15-$20 price band. The stock closed at $19.26 on 15th September 2020, up 7.3% for the past month.