HP Earnings Beat Not Enough for Investors
HP Inc. (NYSE: HPQ) reported its fiscal third-quarter financial results after the markets closed on Wednesday. The firm said that it had $0.43 in earnings per share (EPS) on $13.1 billion in revenue, compared with consensus estimates from Thomson Reuters…
HP Inc. (NYSE: HPQ) reported fiscal third-quarter financial results after markets closed Wednesday. The firm said that it had $0.43 in earnings per share (EPS) on $13.1 billion in revenue, compared with consensus estimates from Thomson Reuters that call for $0.42 EPS and $12.31 billion in revenue. In the same period of last year, HP posted EPS of $0.48 on $11.89 billion in revenue.
In terms of its segments the company reported:
- Personal Systems net revenue was up 12% year over year (up 13% in constant currency) with a 3.7% operating margin. Commercial net revenue increased 11% and Consumer net revenue increased 14%. Total units were up 7% with Notebooks units up 12% and Desktops units down 3%.
- Printing net revenue was up 6% year over year (up 7% in constant currency) with a 17.3% operating margin. Total hardware units were up 1% with Commercial hardware units flat and Consumer hardware units up 1%. Supplies net revenue was up 10% (up 10% in constant currency).
Looking ahead to the fiscal fourth quarter, management expects to see EPS in the range of $0.42 to $0.45. There are consensus estimates calling for $0.44 in EPS and $12.84 billion in revenue.
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On the books, cash and cash equivalents totaled $6.97 billion at the end of the quarter versus $6.29 billion at the end of the previous fiscal year.
Dion Weisler, President and CEO of HP, commented:
Q3 was another outstanding quarter of successfully executing our reinvention strategy. We stabilized supplies revenue a quarter earlier than expected, posted double-digit revenue growth, delivered non-GAAP earnings per share at the high end of our previously provided outlook range and generated approximately $1.7 billion in free cash flow.
Shares of HP closed Wednesday down nearly 1% at $18.85, with a consensus analyst price target of $21.38 and a 52-week range of $13.55 to $19.58. Following the release of the earnings report, the stock was initially down 2% at $18.46 in the after-hours trading session.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
