Has HP Gotten Back on Track?

By Chris Lange Published Aug 28, 11:52AM EDT

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When HP Inc. (NYSE: HPQ | HPQ Price Prediction) released fiscal third-quarter financial results after markets closed Tuesday, the firm said that it had $0.49 in earnings per share (EPS) and $14.3 billion in revenue. The consensus estimates had called for $0.43 in EPS and $13.31 billion in revenue, and the same period of last year reportedly had $0.58 in EPS and $14.6 billion in revenue.

During the latest quarter, Personal Systems net revenue increased 7% year over year to $10.36 million (up 9% in constant currency) with a 5.5% operating margin. Commercial net revenue decreased 6%, and Consumer net revenue increased 42%. Total units were up 11% with Notebooks units up 32% and Desktops units down 30%.

Printing net revenue decreased 20% to $3.93 billion (down 19% in constant currency) with a 12.2% operating margin. Total hardware units were down 2% with Commercial hardware units down 32% and Consumer hardware units up 3%. Supplies net revenue was down 19% (down 18% in constant currency).

HP generated $1.6 billion of free cash flow in the third quarter. On the books, HP’s cash and cash equivalents totaled $4.68 billion at the end of the quarter, up from $4.54 billion at the end of the previous fiscal year.

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Looking ahead to the fiscal fourth quarter, HP expects to see EPS in the range of $0.50 to $0.54. The consensus estimates are $0.50 in EPS and $13.88 billion in revenue for the quarter.

Even further out, HP anticipates EPS in the range of $2.16 to $2.20 for the 2020 fiscal full year. Analysts are calling for $2.10 in EPS and $54.31 billion in revenue for the year.

HP stock traded up nearly 6% to $19.79 on Friday, in a 52-week range of $12.54 to $23.93. The consensus price target is $17.71.

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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.