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HP Inc. posted a surprise increase in quarterly revenue, as a rebound in the company's personal computer business outweighed pressures facing its printing operations.

The big Silicon Valley company, marking the first anniversary of its creation through the breakup of Hewlett-Packard Co., on Tuesday said revenue in the fiscal fourth quarter rose 2%. Most analysts had expected HP's top line to shrink in the period, as it had for seven straight quarters.

HP's net income declined 63%, however, in part due to costs of one-time payments to company retirees. The company's earnings excluding those items came in higher-than the year-earlier period but slightly below analysts' average estimates.

Dion Weisler, HP's chief executive, in an interview called the quarter "a nice roundup to a very challenging but solid year of execution" for the company. "We are entering 2017 with an upward trajectory to momentum."

The Palo Alto, Calif., company gets the biggest share of its revenue from PCs, a market where it is the No. 2 supplier behind Lenovo Group Ltd. But HP gets most of its profit from selling printers and the more lucrative ink and toner used with them.

Both businesses have faced headwinds, as consumers have shifted spending to mobile devices and fewer people print documents. But HP has shown some success in stemming the decline in PCs by taking a bigger share of the declining market and focusing on models that command higher prices and profit margins.

Gartner Inc. recently estimated that HP's share of third-quarter PC shipments—which declined 5.7% for all suppliers in the period—rose to 20.4% from 18.8% in the year-earlier period. HP said Tuesday that unit shipments rose 5% while PC revenue was up 4%.

Mr. Weisler said HP's PC team "outperformed all our top competitors."

The story was a bit less rosy in printing, though Mr. Weisler pointed to signs of progress there, too. HP said total revenue in the business declined 8%, with revenues from supplies down 12%. But hardware unit revenue grew 1%, the first time in recent memory, he said. And declines by other metrics were less severe than earlier this year, Mr. Weisler said.

HP announced a deal in September to buy the printer business of Samsung Electronics Co., a deal that should help the company sell multifunction printing and copying systems and develop some key components for the first time internally.

Hewlett Packard Enterprise Co., the other company created in the breakup, is also reporting results Tuesday. Both companies have seen their stock prices rise this year on pledges to share cash with investors.

Mr. Weisler said Tuesday that HP generated $2.8 billion in free cash flow in the fiscal year ended in October—more than the company had previously projected—and returned 72% to shareholders in dividends and stock buybacks.

HP reported net income for the fourth period ended Oct. 31 of $492 million, or 28 cents a share, compared with profit in the year-earlier period of $1.32 billion, or 73 cents. Revenue rose to $12.51 billion from $12.27 billion.

On an adjusted basis that excludes restructuring charges and other one-time items, HP put fourth-quarter earnings per share at 36 cents, compared with its projection in September of 34 cents to 37 cents. Analysts on that basis had predicted per-share profit of 37 cents on revenue of $11.83 billion, according to FactSet.

For the first fiscal quarter, HP said it expects to report adjusted earnings per share of 35 cents to 38 cents. Analysts' average estimate was 39 cents, according to FactSet.

Mr. Weisler said the first-quarter projection is in line with a prediction in October—reaffirmed by the company Tuesday—that per-share earnings for fiscal 2017 will be $2.00 to $2.10, excluding the impact of pending divestitures. ​

Write to Don Clark at don.clark@wsj.com

(END) Dow Jones Newswires

November 22, 2016 16:35 ET (21:35 GMT)

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