HP Q3 Profit Down, Outlook Weak; Shares Down 5%

(RTTNews) - HP Inc. (HPQ) on Wednesday reported a drop in profit for the third quarter hurt largely by a 4 percent drop in revenues as the company continues to struggle with weak demand for printers. Shares of the computer and printer maker slipped 5 percent in extended session after it detailed a weak fourth quarter outlook.

HP's third-quarter profit dropped to $783 million or $0.45 per share from $854 million or $0.47 per share last year. Excluding one-time items, adjusted earnings for the quarter were $0.48 per share, up from $0.35 per share last year.

Revenues for the quarter dropped 4 percent to $11.89 billion from $12.36 billion last year. On a constant currency basis, revenues were down 1 percent.

Analysts polled by Thomson Reuters expected earnings of $0.44 per share and revenues of $11.47 billion for the quarter.

Last year, HP separated into two independent companies Hewlett Packard Enterprise Co. (HPE) and HP Inc. - in an effort to curb costs improve its sluggish sales. Hewlett Packard Enterprise, with more than $50 billion in annual revenue, provides technology solutions, while HP Inc. supplies PCs and printers.

Personal Systems revenue remained flat at $7.51 billion. HP said printing revenue dropped 14 percent to $4.42 billion with supplies revenues down 18 percent and consumer hardware unit sales declining 22 percent.

"In Q3, we delivered on our financial commitments and continued to make solid progress in executing against our core, growth and future strategic framework," said Dion Weisler, President and CEO, HP Inc.

Looking forward to the fourth quarter, HP expects adjusted earnings of $0.34 to $0.37 per share. For the full-year 2016, HP now sees adjusted earnings of $1.59 to $1.62 per share. Analysts currently estimate earnings of $0.41 and $1.62 per share for the full year.

HPQ closed Wednesday's trading at $14.40, down $0.17 or 1.17%, on the NYSE. The stock further dropped $0.65 or 4.51% in the after-hours trade.