With Xerox hot on its heels, HP Inc.—the PC and printer company—announced better than expected financial results.
“We delivered an excellent Q4, with 11 percent growth,” HP president and CEO Enrique Lores said in a prepared statement. “Our strategy is working, and we are confident in our business heading into fiscal year 2020.”
HP reported net earnings of $400 million on revenues of $15.4 billion for its fourth fiscal quarter of 2019 and net earnings of $3.2 billion on revenues of $58.8 billion for fiscal year 2019. The results beat forecasts, and while YOY revenue growth was only .3 percent, that was enough to quell fears about its previous slowing growth rates.
HP’s biggest business, for PCs, grew 4 percent in fiscal 2019 to $10.43 billion in revenues, also beating expectations thanks to businesses upgrading from Windows 7 to Windows 10. Its second-biggest business, Printing, was down 6 percent to $5.03 billion.
But the elephant in the room, of course, is Xerox, which announced earlier this month that it would like to acquire HP. The firm offered HP shareholders $33.5 billion, but that offer was rejected by HP’s board, which said it significantly undervalued the company.
That’s when things got ugly: Xerox said that it was open to a hostile takeover, and it then issued a statement noting that it would “engage directly with HP shareholders to solicit their support in urging the HP Board to do the right thing.”
“We will not apologize for our ‘aggressive’ tactics,” Xerox CEO John Visentin wrote in the letter to HP’s board. “The most efficient way to prove out the scope of this opportunity with certainty is through mutual due diligence, which you continue to refuse, and we are obligated to require.”
HP didn’t discuss its Xerox problem during a post-earnings conference call. But it did say that it was informed by Intel that it could face chip shortages in the coming months, and that that could impact its PC sales and extend its customers’ migrations to Windows 10.
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