HP Inc. Reports Fiscal 2024 Second Quarter Results

PALO ALTO, Calif. – May 29, 2024 (GLOBE NEWSWIRE) – HP (NYSE: HPQ)

  • Second quarter GAAP diluted net earnings per share (“EPS”) of $0.61, within the previously provided
    outlook of $0.58 to $0.68 per share
  • Second quarter non-GAAP diluted net EPS of $0.82, within the previously provided outlook of $0.76 to $0.86
    per share
  • Second quarter net revenue of $12.8 billion, down 0.8% from the prior-year period
  • Second quarter net cash provided by operating activities of $0.6 billion, free cash flow of $0.5 billion
  • Second quarter returned $0.4 billion to shareholders in the form of dividends and share repurchases

Net Revenue and EPS Results

HP Inc. and its subsidiaries (“HP”) announced fiscal 2024 second quarter net revenue of $12.8 billion, down 0.8% (down 1.2% in constant currency) from the prior-year period.

“We delivered a solid quarter and first half, and unveiled an innovative portfolio of solutions designed for the AI and hybrid era,” said Enrique Lores, President and CEO, HP Inc. “As the market recovers and new AI PCs are introduced, we are well positioned to drive profitable growth across our business.”

Second quarter GAAP diluted net EPS was $0.61, down from $1.06 in the prior-year period and within the previously provided outlook of $0.58 to $0.68. Second quarter non-GAAP diluted net EPS was $0.82, up from $0.79 in the prior-year period and within the previously provided outlook of $0.76 to $0.86. Second quarter non-GAAP net earnings and non-GAAP diluted net EPS excludes after-tax adjustments of $205 million, or $0.21 per diluted share, related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, and tax adjustments.

Asset Management

HP’s net cash provided by operating activities in the second quarter of fiscal 2024 was $581 million. Accounts receivable ended the quarter at $4.3 billion, up 5 days quarter over quarter to 31 days. Inventory ended the quarter at $7.5 billion, up 9 days quarter over quarter to 70 days. Accounts payable ended the quarter at $14.4 billion, up 16 days quarter over quarter to 132 days.

HP generated $481 million of free cash flow in the second quarter. Free cash flow includes net cash provided by operating activities of $581 million adjusted for net investments in leases of $19 million and net investments in property, plant, and equipment of $119 million.

HP’s dividend payment of $0.2756 per share in the second quarter resulted in cash usage of $0.3 billion. HP also utilized $0.1 billion of cash during the quarter to repurchase approximately 3.5 million shares of common stock in the open market. HP exited the quarter with $2.5 billion in gross cash, which includes cash and cash equivalents of $2.4 billion, restricted cash of $75 million, and short-term investments of $3 million included in other current assets. Restricted cash relates to amounts collected and held on behalf of a third party for trade receivables previously sold.

Fiscal 2024 Second Quarter Segment Results

Personal Systems net revenue was $8.4 billion, up 3% year over year (up 2% in constant currency) with a 6.0% operating margin. Consumer PS net revenue was down 3% and Commercial PS net revenue was up 6%. Total units were up 7% with Consumer PS units down 1% and Commercial PS units up 12%.

Printing net revenue was $4.4 billion, down 8% year over year (down 7% in constant currency) with a 19.0% operating margin. Consumer Printing net revenue was down 16% and Commercial Printing net revenue was down 12%. Supplies net revenue was down 5% (down 4% in constant currency). Total hardware units were down 17%, with Consumer Printing units down 17% and Commercial Printing units down 17%.

Outlook

For the fiscal 2024 third quarter, HP estimates GAAP diluted net EPS to be in the range of $0.63 to $0.77 and non-GAAP diluted net EPS to be in the range of $0.78 to $0.92. Fiscal 2024 second quarter non-GAAP diluted net EPS estimates exclude $0.15 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items.

For fiscal 2024, HP estimates GAAP diluted net EPS to be in the range of $2.60 to $2.90 and non-GAAP diluted net EPS to be in the range of $3.30 to $3.60. Fiscal 2024 non-GAAP diluted net EPS estimates exclude $0.70 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items. For fiscal 2024, HP anticipates generating free cash flow in the range of $3.1 to $3.6 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.