Is HP Earnings Beat Good Enough?

When HP Inc. (NYSE: HPQ) released its fiscal third-quarter earnings report after the markets closed on Thursday, the company said that it had $0.52 in earnings per share (EPS) and $14.59 in revenue. That compares with consensus estimates from Thomson Reuters that called for $0.51 in EPS and $14.27 billion in revenue, as well as the $0.43 per share and $13.06 billion reported in the same period of last year.

Looking ahead to its fiscal fourth quarter, the company expects to see EPS in the range of $0.52 to $0.55. Consensus estimates call for $0.54 in EPS and $14.86 billion in revenue for the quarter.

In terms of its segments, the company reported:

• Personal Systems net revenue was up 12% year over year (up 9% in constant currency) with a 3.9% operating margin. Commercial net revenue increased 13% and Consumer net revenue increased 10%. Total units were up 6% with Notebooks units up 6% and Desktops units up 7%.
• Printing net revenue was up 11% year over year (up 9% in constant currency) with a 16.0% operating margin. Total hardware units were up 12% with Commercial hardware units up 91% and Consumer hardware units up 2%. Supplies net revenue was up 8% (up 6% in constant currency).

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Dion Weisler, president and CEO of HP, commented:

Q3 was another strong quarter, with consistent and balanced performance across segments and regions. We delivered differentiated innovation in our core, advanced our growth initiatives and are investing in our future while delivering profitable growth, with non-GAAP EPS up 21% year over year.

Shares of HP closed Thursday at $24.63, with a consensus analyst price target of $26.20 and a 52-week range of $18.96 to $24.80. Following the announcement, the stock was down about 3% at $23.90 in early trading indications Friday.

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