HP Inc. Reports Fiscal 2022 Second Quarter Results

PALO ALTO, Calif., May 31, 2022 (GLOBE NEWSWIRE) — HP Inc. (HPQ) and its subsidiaries (“HP”) announced fiscal 2022 second quarter net revenue of $16.5 billion, up 3.9% (up 4.9% in constant currency) from the prior-year period.

“We delivered a solid quarter of revenue and non-GAAP EPS growth, while returning significant capital to shareholders,” said Enrique Lores, HP President and CEO. “Collectively, our key growth businesses grew double digits and drove $5.6 billion in revenue in the first half of the year. Our consistent performance in the face of a volatile macro environment gives us confidence in our plans to build a stronger HP.”

Second quarter GAAP diluted net EPS was $0.94, down from $0.98 in the prior-year period and compares to the previously provided outlook of $0.95 to $1.01. Second quarter non-GAAP diluted net EPS was $1.08, up from $0.93 in the prior-year period and at the high end of the previously provided outlook of $1.02 to $1.08. Second quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax adjustments of $152 million, or $0.14 per diluted share, related to restructuring and other charges, acquisition-related charges, amortization of intangible assets, non-operating retirement-related (credits)/charges, and tax adjustments.

Asset management

HP’s net cash provided by operating activities in the second quarter of fiscal 2022 was $0.5 billion. Accounts receivable ended the quarter at $5.4 billion, up 2 days quarter over quarter to 29 days. Inventory ended the quarter at $8.9 billion, up 2 days quarter over quarter to 61 days. Accounts payable ended the quarter at $17.0 billion, down 3 days quarter over quarter to 116 days.

HP generated $0.4 billion of free cash flow in the second quarter. Free cash flow includes net cash provided by operating activities of $0.5 billion adjusted for net investments in leases of $21 million and net investments in property, plant and equipment of $178 million.

HP’s dividend payment of $0.25 per share in the second quarter resulted in cash usage of $0.3 billion. HP also utilized $1.0 billion of cash during the quarter to repurchase approximately 27.4 million shares of common stock in the open market. As a result, HP returned 362% of its second quarter free cash flow to shareholders. HP exited the quarter with $4.5 billion in gross cash, which includes cash and cash equivalents and short-term investments of $5 million.

Fiscal 2022 second quarter segment results

• Personal Systems net revenue was $11.5 billion, up 9% year over year (up 11% in constant currency) with a 6.9% operating margin. Consumer net revenue decreased 6% and Commercial net revenue increased 18%. Total units were down 17% with Notebooks units down 23% and Desktops units up 11%.
• Printing net revenue was $5.0 billion, down 7% year over year (down 6% in constant currency) with a 19.3% operating margin. Consumer net revenue was down 12% and Commercial net revenue was down 4%. Supplies net revenue was down 6% (down 6% in constant currency). Total hardware units were down 23% with Consumer units down 24% and Commercial units down 17%.

Outlook
For the fiscal 2022 third quarter, HP estimates GAAP diluted net EPS to be in the range of $0.91 to $0.96 and non-GAAP diluted net EPS to be in the range of $1.03 to $1.08. Fiscal 2022 third quarter non-GAAP diluted net EPS estimates exclude $0.12 per diluted share, primarily related to restructuring and other charges, acquisition-related charges, Russia related charges, amortization of intangible assets, non-operating retirement-related (credits)/charges, tax adjustments and the related tax impact on these items.

For fiscal 2022, HP is updating its estimate of GAAP diluted net EPS to be in the range of $3.79 to $3.93 and raising its previous estimate of non-GAAP diluted net EPS to be in the range of $4.24 to $4.38. Fiscal 2022 non-GAAP diluted net EPS estimates exclude $0.45 per diluted share, primarily related to restructuring and other charges, acquisition-related charges, Russia related charges, amortization of intangible assets, non-operating retirement-related (credits)/charges, tax adjustments and the related tax impact on these items. For fiscal 2022, HP anticipates generating free cash flow of at least $4.5 billion.