HP Inc. (NYSE: HPQ) reported fiscal Q1 2020 earnings for the period ending January, beating analyst estimates even as the company continues to fend off acquisition attempts by Xerox (NYSE: XRX).

HP posted sales of $14.62 billion for the quarter coming in just below consensus estimates of $14.64 billion.

Revenues were down 0.6% compared to the same quarter the previous year as sales in the company’s printing segment dragged down the overall top line with a 7% shrinkage year over year.

Earnings per share for the computer and printer maker were reported as $0.64 which comfortably beat Wall Street estimates of $0.54 per share.

Our Q1 results reflect a business that is strong and getting stronger. Our non-GAAP EPS growth of 25% was significantly above our guided range, driven by tremendous execution against our strategic priorities. This is a team at the top of its game, combining the industry’s best innovation with disciplined execution and cost management to deliver for our shareholders. We have great confidence in our plans and are raising our full-year earnings outlook.HP Inc. President and CEO, Enrique Lores

The earnings report from HP is the first since the company entered a protracted battle with Xerox over a potential merger. Xerox’s business is centred around large printers and copiers while HP focuses on smaller printers and supplies along with its line of computers and laptops. With both companies in the midst of cost cutting combining the equipment makers may make sense and allow for further cuts of a combined entity.

First reported by the Wall Street Journal in November last year, Xerox offered HP shareholders $22 per share when the stock was worth about $18 but HP refused the offer. After Xerox’s bid turned hostile in January, earlier this month Xerox upped their offer to $24 per share of HP. Just last week, HP adopted a ‘poison pill’ to help fend off the hostile takeover attempt, which gives shareholders the right to buy more shares at a discount if Xerox or another entity acquires more than 20% of overall shares.

Source: YCharts

HP stock has not had a great run recently, gaining only 3.9% over the course of 2019, much of which happened after news of Xerox’s interest for the firm became public. While the stock is up 10.5% in 2020 thus far it has yet to recapture its high point of just over $26 per share from October of 2018. Many analysts believe that if Xerox were to up its offer for HP to $26 per share the company and its shareholders could be persuaded to take the deal as it would ensure that no HP shareholders in the past 10 years would lose money on the deal.

After releasing earnings, shares in HP were up 3% in after market trading as of the time of publishing.

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