PCs may be a larger business for HP Inc. (HPQ) revenue-wise, but printers are still its main cash cow. That's a big reason why HP is off sharply following its latest earnings report, in spite of soundly beating sales estimates on the back of better-than-expected PC demand.
HP reported fiscal fourth-quarter revenue of $12.51 billion (up 2% annually) and adjusted EPS of 36 cents. The former topped a consensus analyst estimate of $11.89 billion, but the latter was only in-line.
In addition, HP guided for fiscal first-quarter adjusted EPS of 35 cents to 38 cents, which at the midpoint falls short of a 38 cent consensus. Fiscal 2017 adjusted EPS guidance of $1.55 to $1.65 is in-line with a $1.60 consensus, and at the midpoint matches HP's fiscal 2016 EPS.
Shares are down 6.7% as of the time of this article. They went into earnings up 30% on the year.
Driving the fourth-quarter sales beat: Personal Systems division sales rose 4% annually to $8.01 billion, easily topping a consensus estimate of $7.46 billion. Operating income rose a healthy 18% to $346 million.
By contrast, the division's sales were flat in the third quarter, and down 10% in the second quarter. Notebook and consumer PC sales were the unit's biggest fourth-quarter growth drivers, but desktop and business PC sales also rose.