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HP gives upbeat 2019 profit forecast on strong demand

It expects profit of US$2.12 to US$2.22 a share in the year ending Oct; analysts project US$2.15 on average

San Francisco

HP Inc gave an upbeat profit forecast for fiscal 2019, signalling that the world's largest maker of personal computers will continue to see robust demand for its growing product line-up.

Profit, excluding certain items, will be US$2.12 a share to US$2.22 a share in the year that ends next October, the Palo Alto, California-based company said on Wednesday in a statement. Analysts on average projected US$2.15 a share, according to data compiled by Bloomberg. The shares gained about 3 per cent in extended trading after closing at US$26.06.

The technology giant has climbed to the top of the PC market under chief executive officer Dion Weisler by overhauling its product portfolio. PC shipments gained 1.4 per cent in the second quarter after years of decline, according to market researcher Gartner Inc. HP also has focused on cutting costs as part of a restructuring that started in fiscal 2017. As part of the effort, the company said in June that 4,500 to 5,000 employees will have been let go by the end of fiscal 2019.

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"Our goal is to outgrow our respective markets," Steve Fieler, the company's chief financial officer, said at a meeting with analysts in New York. "For revenue, we expect to continue being market leaders."

The company did not provide a sales forecast. It said that it will increase its quarterly dividend 15 per cent through the year and anticipated free cash flow of at least US$3.7 billion.

HP has sought to make its printer division a key part of its plan to boost margins, and now targets more business customers after buying Samsung's printer unit. The unit will have an operating margin of at least 16 per cent next year, Mr Fieler said. BLOOMBERG