HP Earnings Beat Not Enough for Investors

By Chris Lange Updated Jan 12, 8:51AM EST · Published Aug 23, 4:22PM EDT

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HP Earnings Beat Not Enough for Investors — © Thinkstock

HP Inc. (NYSE: HPQ) reported fiscal third-quarter financial results after markets closed Wednesday. The firm said that it had $0.43 in earnings per share (EPS) on $13.1 billion in revenue, compared with consensus estimates from Thomson Reuters that call for $0.42 EPS and $12.31 billion in revenue. In the same period of last year, HP posted EPS of $0.48 on $11.89 billion in revenue.

In terms of its segments the company reported:

Personal Systems net revenue was up 12% year over year (up 13% in constant currency) with a 3.7% operating margin. Commercial net revenue increased 11% and Consumer net revenue increased 14%. Total units were up 7% with Notebooks units up 12% and Desktops units down 3%.

Printing net revenue was up 6% year over year (up 7% in constant currency) with a 17.3% operating margin. Total hardware units were up 1% with Commercial hardware units flat and Consumer hardware units up 1%. Supplies net revenue was up 10% (up 10% in constant currency).

Looking ahead to the fiscal fourth quarter, management expects to see EPS in the range of $0.42 to $0.45. There are consensus estimates calling for $0.44 in EPS and $12.84 billion in revenue.

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On the books, cash and cash equivalents totaled $6.97 billion at the end of the quarter versus $6.29 billion at the end of the previous fiscal year.

Dion Weisler, President and CEO of HP, commented:

Q3 was another outstanding quarter of successfully executing our reinvention strategy. We stabilized supplies revenue a quarter earlier than expected, posted double-digit revenue growth, delivered non-GAAP earnings per share at the high end of our previously provided outlook range and generated approximately $1.7 billion in free cash flow.

Shares of HP closed Wednesday down nearly 1% at $18.85, with a consensus analyst price target of $21.38 and a 52-week range of $13.55 to $19.58. Following the release of the earnings report, the stock was initially down 2% at $18.46 in the after-hours trading session.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.