HPQ.US yesterday released its outlook for fiscal year 2022, exceeding analysts' expectations, according to the Zhitong Financial APP. Hewlett-Packard expects revenue to continue to grow, which runs counter to analysts' widely expected revenue growth to have peaked. After the news, the company's shares rose about 3 per cent in after-hours trading yesterday and nearly 5 per cent before today's trading.
Marie Myers, HP's chief financial officer, said at an online investor presentation yesterday that HP would earn between $4.07 and $4.27 a share in fiscal 2022, a forecast above the average analyst forecast of $3.78 a share.
While analysts had expected HP's annual revenue to fall sharply over the next four years, Myers said long-term revenue growth would remain "low in single digits".
Like many of its peers in the computer hardware industry, Enrique Lores, the company's chief executive, is trying to convince investors that the rebound in demand for electronic devices triggered by the COVID-19 epidemic will not fade with the reopening of places such as offices and schools. Myers said at the presentation that HP was shifting its business focus to higher-margin products.
Lores believes that office equipment that has been idle for more than a year needs to be upgraded, and the growth in demand on the B side will make up for the slowdown in C-end purchases. He also shifted HP's printer business from disposable device sales to subscription services. Lores said that in the long run, the company will persuade customers to pay a subscription fee to Hewlett-Packard, allowing customers to remotely manage their own printing. For example, when the printer signals that the ink is running out, and automatically orders in advance through the subscription service, Lores says the subscription service will enable the company to achieve greater profit growth.
The chief executive is also trying to expand HP's business to provide 3D printing services for markets such as packaging and into PC peripherals in an attempt to attract gaming enthusiasts with products such as mice and headphones.
It is understood that in September, rival DELL.US forecast annual revenue growth of 3 to 4 per cent by 2026 and announced a $5 billion share buyback plan. Hewlett-Packard said it expects to return all its free cash flow to shareholders through dividends and share buybacks in fiscal year 2022. It is reported that HP's board of directors has approved an increase in the annual dividend to $1 per share, an increase of about 29% over the previous dividend, and the remaining cash flow is expected to be returned to shareholders through share buybacks.
Hewlett-Packard's sales fell short of expectations in the fiscal third quarter ended July 31, and PC production also faced a cut due to chip shortages. Lores said HP was improving its operating environment by signing long-term agreements with suppliers to better respond to the "supply-driven" situation, which he expects to continue until at least the first half of 2022.
Hewlett-Packard shares, which rose as high as $30 in pre-market trading today, rose 4.76 per cent to $29.950 as of press time. The stock has risen nearly 19 per cent so far this year.