HP Earnings: Revenue Grows As Both PC and Printing Divisions Outperform

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HP
Helmerich & Payne

HP Inc. (NYSE:HPQ) announced its fiscal Q3 results on Wednesday, August 23.  The results were in line with our expectations as both the Personal Systems and Printing divisions reported growth in revenues and improvements in both market share and product mix. For the quarter, the company’s revenues grew by 10% to $13.06 billion. The company also reported non-GAAP diluted net EPS of $0.43, which was at the higher end of its guidance range. Some of the key takeaways from the company’s earnings release are as follows:

  • The company reported that its worldwide share improved by 2% y-o-y to 22.8% on the back of new launches for the premium consumer PC market, which includes Spectre 2 and the new line of Omen gaming laptops. As a result, its Personal System revenues grew by 12% y-o-y to $8.4 billion, with 7% growth in total units shipped. Furthermore, the company stated that the margins for the personal systems division improved sequentially even though component costs (shortage of NAND flash is driving costs higher) continued to impact profitability. Within the Personal Systems division, Notebooks revenue grew by 16% y-o-y as unit sales improved by 12% y-o-y, while desktops revenue grew by 5% despite a 3% decline in unit sales.
  • The Printer division reported another quarter of growth, as revenues grew by 6% y-o-y to $4.7 billion, driven by improving sales of both supplies and hardware. While hardware unit sales increased by 1%, supplies revenues grew by 10%. Supplies revenues stabilized as the company continues to pursue its “four box model” to drive revenues.

For precise figures, please refer to our full analysis for Hewlett Packard Incorporated

Outlook For Q4 2017 And 2017

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For fiscal Q4, HP expects its supplies revenues to flatline. In Personal Systems, it expects to see continued increases in the cost of components, which the company plans to pass on to consumers through an increase in PC prices. HP estimates GAAP diluted net EPS from continuing operations to be in the range of $0.37 to $0.41, and non-GAAP diluted net EPS to be in the range of $0.42 to $0.45. For 2017, HP estimates non-GAAP diluted net EPS to be in the range of $1.63 to $1.66.

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