By Maria Armental and Rachael King
HP Inc. expects 2018 to be another good year, with profit projections beating Wall Street expectations, and it's pledging to continue to return most of its cash to shareholders.
The high return rate, in the form of dividends and share buybacks, has driven the company's shares through leaner times.
On Thursday, HP said it expects to generate at least $3 billion in free cash flow, the amount remaining after capital expenditures, and pledged to continue passing on to shareholders 50% to 75% of that money.
The board also approved a 5% increase in the quarterly dividend.
Over all, HP expects profit to reach $1.69 to $1.79 a share next year, or $1.74 to $1.84 on an adjusted basis, compared with analysts' projected $1.66 a share, or $1.76 a share on an adjusted basis.
The company has been gaining market share in world-wide PC shipments, and battling for the title of largest maker of personal computers with Lenovo Group Ltd., while focusing on higher-profit segments like gaming and convertible laptops.
"Our business is focused on driving profitable share," Chief Financial Officer Cathie Lesjak said on a conference call Thursday. "There is no question this is good, strong, profitable share."
Chief Executive Dion Weisler said, "If you were to roll the tapes back to my very first security analyst meeting five years ago, I stood on stage and said, we don't take share for share's sake. That's something that's like prime directive across this organization."
Formed in 2015, HP is the PC-and-printer business once part of Hewlett-Packard, the technology pioneer that Bill Hewlett and Dave Packard famously started in their Palo Alto, Calif., garage in 1939.
Shares, up 37% this year, closed down a penny Thursday at $20.40.
Write to Maria Armental at [email protected] and Rachael King at [email protected]