HP Inc. Tightens The Belt: Mixed Q3 Results And Cautious FY24 Outlook

HP Inc. HPQ shares are trading lower after it reported third-quarter results. Net revenue rose 2.4% Y/Y to $13.52 billion, beating the consensus of $13.38 billion.

By segment, Personal Systems net revenue rose 5% Y/Y to $9.4 billion with a 6.4% operating margin, and Printing net revenue fell 3% Y/Y to $4.1 billion with an operating margin of 17.3%.

In Personal Systems segment, total units increased by 1%, with Consumer PS units down 6% and Commercial PS units up 6%.

Adjusted operating margin contracted 70 bps Y/Y to 8.1% in the quarter. Adjusted EPS declined 3% Y/Y to $0.83, missing the street view of $0.86.

Operating cash flow stood at $1.4 billion (+46% Y/Y), and free cash flow came in at $1.3 billion (+50% Y/Y) in the quarter.

The company exited the quarter with gross cash of $2.9 billion, including cash and equivalents of $2.8 billion.

Dividend & Buyback: The company returned $0.9 billion to shareholders in the form of dividends and share repurchases in the quarter.

HP’s board increased its share repurchase authorization to a total of $10 billion.

Outlook: For the fourth quarter, HP expects adjusted EPS of $0.89 –$0.99 vs. consensus of $0.95.

For FY24, the company tighetened its outlook for adjusted EPS to $3.35 – $3.45 vs. consensus of $3.45 (prior view $3.30 – $3.60).

Investors can gain exposure to the stock via 3D Printing (The) ETF PRNT and Affinity World Leaders Equity ETF WLDR.

Price Action: HPQ shares are down 2.16% at $34.01 premarket at the last check Thursday.

Image via Shutterstock

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