Technology

Has HP Gotten Back on Track?

When HP Inc. (NYSE: HPQ) released fiscal third-quarter financial results after markets closed Tuesday, the firm said that it had $0.49 in earnings per share (EPS) and $14.3 billion in revenue. The consensus estimates had called for $0.43 in EPS and $13.31 billion in revenue, and the same period of last year reportedly had $0.58 in EPS and $14.6 billion in revenue.

During the latest quarter, Personal Systems net revenue increased 7% year over year to $10.36 million (up 9% in constant currency) with a 5.5% operating margin. Commercial net revenue decreased 6%, and Consumer net revenue increased 42%. Total units were up 11% with Notebooks units up 32% and Desktops units down 30%.

Printing net revenue decreased 20% to $3.93 billion (down 19% in constant currency) with a 12.2% operating margin. Total hardware units were down 2% with Commercial hardware units down 32% and Consumer hardware units up 3%. Supplies net revenue was down 19% (down 18% in constant currency).

HP generated $1.6 billion of free cash flow in the third quarter. On the books, HP’s cash and cash equivalents totaled $4.68 billion at the end of the quarter, up from $4.54 billion at the end of the previous fiscal year.

Looking ahead to the fiscal fourth quarter, HP expects to see EPS in the range of $0.50 to $0.54. The consensus estimates are $0.50 in EPS and $13.88 billion in revenue for the quarter.

Even further out, HP anticipates EPS in the range of $2.16 to $2.20 for the 2020 fiscal full year. Analysts are calling for $2.10 in EPS and $54.31 billion in revenue for the year.

HP stock traded up nearly 6% to $19.79 on Friday, in a 52-week range of $12.54 to $23.93. The consensus price target is $17.71.