Revenue as well as earnings at HP Inc contracted during the most recently ended quarter, but the business showed new signs of stabilization in its declining PC business, its largest generator of revenue
The company, based in Palo Alto, California said that revenue from personal systems was flat for the quarter following five consecutive quarters of declines, as PC sales in the unit were up 4%.
Revenue dropped by 14% for the printing business, which is what generates the majority of profits at HP. This reflected more use of file sharing and email instead of printing of documents.
Shares at HP fell by 5.4% in trading after hours on Wednesday on an outlook for profit for the ongoing quarter below that of expectations of analysts.
HP cited signs of its printer business improving, and the overall revenue and profit of the company that topped expectations of analysts.
CEO of HP Dion Weisler said he was very pleased with the company’s progress during the just ended quarter.
HP became an independent company in 2015 through a spin off from the previous Hewlett-Packard Co.
While the two major businesses at HP have not grown, its stock price has increased by over 21% during 2016 because of its cash flow being steady, of which it uses most for stock buybacks and dividends.
The company was able to generate free cash flow of $1 billion during its third quarter, which put it on target for the generation of $2 billion to $2.3 billion of free cash flow for its fiscal year that ends during October.
The company CFO Cathie Lesjak said HP was close to its free cash flow goal.
HP is the No. 2 maker of PCs behind just Lenovo Group and has suffered just as its rivals have as spending by consumers has shifted from PCs to other products such as smartphones and tablets.
However, market researchers concluded recently that the decline rate moderated during the second quarter of this year. International Data Corp during July estimated that the quarterly PC shipments for HP were up 5.1% compared to the same period one year ago, although the overall market for PC shipments fell by 4.5%.
Weisler had pushed the company focus to parts of the industry that are faster growing that command margins that are higher such as PCs for gaming and premium notebooks.
He told analysts on Wednesday the strategy was paying off as HP earned market share and the average prices of sales for their consumer PCs increased during the just ended quarter.
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