PALO ALTO, Calif., Feb. 28, 2023 (GLOBE NEWSWIRE) –HP
- First quarter GAAP diluted net earnings per share (“EPS”) of $0.49, within the previously provided outlook of $0.47 to $0.57 per share
- First quarter non-GAAP diluted net EPS of $0.75, within the previously provided outlook of $0.70 to $0.80 per share
- First quarter net revenue of $13.8 billion, down 18.8% from the prior-year period
- First quarter net cash used in operating activities of $(16) million, free cash flow of $(0.2) billion
- First quarter returned $0.4 billion to shareholders in the form of share repurchases and dividends
| HP Inc.’s fiscal 2023 first quarter financial performance | ||||||||
| Q1 FY23 | Q1 FY22 | Y/Y | ||||||
| GAAP net revenue ($B) | $ | 13.8 | $ | 17.0 | (18.8)% | |||
| GAAP operating margin | 5.5% | 8.0% | (2.5) pts | |||||
| GAAP net earnings ($B) | $ | 0.5 | $ | 1.1 | (55)% | |||
| GAAP diluted net EPS | $ | 0.49 | $ | 0.99 | (51)% | |||
| Non-GAAP operating margin | 7.8% | 8.8% | (1.0) pts | |||||
| Non-GAAP net earnings ($B) | $ | 0.7 | $ | 1.2 | (38)% | |||
| Non-GAAP diluted net EPS | $ | 0.75 | $ | 1.10 | (32)% | |||
| Net cash (used in) provided by operating activities ($B) | $ | (0.0) | $ | 1.7 | (101)% | |||
| Free cash flow ($B) | $ | (0.2) | $ | 1.4 | (114)% |
Notes to table
Information about HP Inc.’s use of non-GAAP financial information is provided under “Use of non-GAAP financial information” below.
Net revenue and EPS results
HP Inc. and its subsidiaries (“HP”) announced fiscal 2023 first quarter net revenue of $13.8 billion, down 18.8% (down 14.7% in constant currency) from the prior-year period.
“We delivered on our non-GAAP EPS target despite industry-wide headwinds, reflecting disciplined execution across our business,” said Enrique Lores, HP President and CEO. “The Future Ready plan we announced last quarter is having an immediate impact, as we continue to reduce our costs while maintaining investments in long-term growth.”
First quarter GAAP diluted net EPS was $0.49, down from $0.99 in the prior-year period and within the previously provided outlook of $0.47 to $0.57. First quarter non-GAAP diluted net EPS was $0.75, down from $1.10 in the prior-year period and within the previously provided outlook of $0.70 to $0.80. First quarter non-GAAP net earnings and non-GAAP diluted net EPS excludes after-tax adjustments of $262 million, or $0.26 per diluted share, related to restructuring and other charges, acquisition and divestiture related charges, amortization of intangible assets, debt extinguishment costs, non-operating retirement-related (credits)/charges, and tax adjustments.
Asset management
HP’s net cash used in operating activities in the first quarter of fiscal 2023 was $(16) million. Accounts receivable ended the quarter at $4.3 billion, flat quarter over quarter at 28 days. Inventory ended the quarter at $7.3 billion, up 3 days quarter over quarter to 60 days. Accounts payable ended the quarter at $13.5 billion, down 4 days quarter over quarter to 110 days.
HP generated $(0.2) billion of free cash flow in the first quarter. Free cash flow includes net cash used in operating activities of $(16) million adjusted for net investments in leases of $16 million and net investments in property, plant and equipment of $192 million.
HP’s dividend payment of $0.2625 per share in the first quarter resulted in cash usage of $0.3 billion. HP also utilized $0.1 billion of cash during the quarter to repurchase approximately 3.6 million shares of common stock in the open market. HP exited the quarter with $1.8 billion in gross cash, which includes cash, cash equivalents and restricted cash, and short-term investments of $18 million included in other current assets. Cash, cash equivalents and restricted cash includes $364 million of restricted cash related to amounts collected and held on behalf of a third party for trade receivables previously sold.
Fiscal 2023 first quarter segment results
- Personal Systems net revenue was $9.2 billion, down 24% year over year (down 20% in constant currency) with a 5.4% operating margin. Consumer PS net revenue decreased 36% and Commercial PS net revenue decreased 18%. Total units were down 28% with Consumer PS units down 33% and Commercial PS units down 24%.
- Printing net revenue was $4.6 billion, down 5% year over year (down 2% in constant currency) with a 18.9% operating margin. Consumer Printing net revenue was down 3% and Commercial Printing net revenue was up 2%. Supplies net revenue was down 7% (down 6% in constant currency). Total hardware units were up 2% overall, with Consumer Printing units up 3% and Commercial Printing units down 8%.
Outlook
For the fiscal 2023 second quarter, HP estimates GAAP diluted net EPS to be in the range of $0.40 to $0.50 and non-GAAP diluted net EPS to be in the range of $0.73 to $0.83. Fiscal 2023 second quarter non-GAAP diluted net EPS estimates exclude $0.33 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related (credits)/charges, tax adjustments and the related tax impact on these items.
For fiscal 2023, HP reaffirms GAAP diluted net EPS to be in the range of $2.22 to $2.62 and non-GAAP diluted net EPS to be in the range of $3.20 to $3.60. Fiscal 2023 non-GAAP diluted net EPS estimates exclude $0.98 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, debt extinguishment costs, non-operating retirement-related (credits)/charges, tax adjustments and the related tax impact on these items. For fiscal 2023, HP anticipates generating free cash flow in the range of $3.0 to $3.5 billion.
More information on HP’s earnings, including additional financial analysis and an earnings overview presentation, is available on HP’s Investor Relations website at investor.hp.com.
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