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HP Inc. (HPQ) - Get HP Inc. Report shares ticked higher Wednesday after the printer and PC maker posted modestly stronger-than-expected fourth quarter earnings as it continues to resist a $33 billion takeover approach from its smaller rival Xerox Corp. (XRX) - Get Xerox Holdings Corporation Report

HP said non-GAAP earnings for the three months ending in October, the company's fiscal fourth quarter, came in at 60 cents per share, up 11.1% from the same period last year and 2 cents ahead of the Street consensus forecast. Group revenues, HP said, rose 0.3% to $15.4 billion, just ahead of the $15.25 billion tally analysts had estimated for the world's second-largest PC maker.

Looking into the first few months of its 2020 fiscal year, HP said it expects non-GAAP earnings in the region of 53 to 56 cents per share, and a full-year range of $2.24 to $2.32 per share, just ahead of the Refinitiv forecast of $2.23 per share. 

HP CEO Enrique Lores told investors on a conference call late Tuesday that he would not add to comments on the proposed $33.5 takeover bid from Xerox, which the company threatened to take directly to shareholders yesterday, but noted that he still considers HP shares undervalued, despite the 20% gain they've recorded since the first Xerox offer.

"The key thing that we see is (the) gap between the current value of the stock, but the net present value of the cash flow projections that we have in our plan," Lores said. "And this is what drives our comment and think about being undervalued."

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"What we have proven this quarter and we have proven in the past is that we have a clear ability to execute, and that we deliver on our commitments," he added. "And our expectation is that by executing every quarter and meeting our guidelines we will be seeing that gap to be reduced."

HP shares were marked 0.2% higher at the start of trading Wednesday to change hands at $20.05 each. Xerox shares, meanwhile, edged 0.44% higher to $38.48. 

Xerox said Tuesday that it will take is $33 billion takeover proposal for HP directly to shareholders unless the two sides are able to agree on access to private financial information, adding another layer of tension between management of the world's leading printing and PC groups.

In a letter to the HP board, Xerox said it has a "compelling proposal" for a tie-up that will allow HP shareholder to "realize immediate cash value and enjoy equal participation in the substantial upside" and denied charges its takeover bid was "uncertain", as HP declared in a Sunday letter.

"The debate on HP continues to center on the proposed Xerox acquisition; while we learned nothing incremental, we continue to believe that consolidation within the printing industry makes sense and see significant potential for cost takeout if the two companies were to combine," said Credit Suisse analyst Matthew Cabral, who carries a neutral rating on the stock with an $18 price target.

"That said, leverage on the transaction as currently proposed deal remains a key risk," he added. "Fundamentally for HP, we still struggle with the steady-state EPS/FCF outlook given outstanding unknowns on the planned business model shift away from "razor / razor blade;" Supplies remains a key metric in the interim."