Has HP Gotten Back on Track?
HP shares got a boost after it released fiscal third-quarter financial results that were lower year over year but better than expected.
When HP Inc. (NYSE: HPQ | HPQ Price Prediction) 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.
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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.
