HP Slides Despite Meeting Earnings

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HP Inc. (NYSE: HPQ) reported fiscal fourth-quarter financial results after markets closed on Tuesday. The company posted $0.36 in earnings per share (EPS) and $12.5 billion in revenue. There were consensus estimates that called for $0.36 in EPS and $11.88 billion in revenue. The same period from last year had $0.30 in EPS and $12.27 billion in revenue.

In terms of guidance for the fiscal first quarter, the company expects EPS in the range of $0.35 to $0.38, versus the consensus estimates that called for $0.38 in EPS and $11.59 billion in revenue for the coming quarter.

Net cash provided from operating activities during this quarter was $0.7 billion, while last year it totaled $2.6 billion. On the books, cash and cash equivalents totaled $6.29 billion at the end of the quarter, the same period from last year had $7.58 billion.

The company reported its business segment results as:

  • Personal Systems net revenue was up 4% year over year (up 5% in constant currency) with a 4.3% operating margin. Commercial net revenue increased 3% and Consumer net revenue increased 7%. Total units were up 5% with Notebooks units up 9% and Desktops units up 1%.
  • Printing net revenue was down 8% year over year (down 6% in constant currency) with a 14.0% operating margin. Total hardware units were up 1% from the prior-year period, with Commercial hardware units up 10% and Consumer hardware units down 3%. Supplies net revenue was down 12% (down 10% in constant currency).

Dion Weisler, President and CEO of HP, commented:

We delivered on our full year financial commitments and executed well on our strategy to protect our core, drive growth and invest in our future all while taking cost out of the business. As we’ve proved quarter over quarter, we are confident in our abilities to execute and deliver, while making business decisions focused on the long-term success for the company.

Shares of HP closed Tuesday at $15.95, with a consensus analyst price target of $16.27 and a 52-week trading range of $8.91 to $16.19. Following the release of the earnings report the stock was initially down 1.6% at $15.70 in the after-hours trading session.