HP Inc. reports revenue surge to $13.5bn and massive share buyback in fiscal Q3

HP Inc. has released its financial results for the third quarter of fiscal 2024, revealing a notable revenue increase and strategic moves aimed at enhancing shareholder value. The company reported net revenue of $13.5 billion for the quarter, marking a 2.4% rise from the previous year. When adjusted for constant currency, this growth reaches 3%, underscoring HP’s resilience and adaptability in a challenging market.

In terms of earnings, HP Inc. reported a GAAP diluted net earnings per share (EPS) of $0.65 for the third quarter, which is within the company’s forecasted range of $0.63 to $0.77 per share. This represents a decrease from the $0.76 per share recorded in the same quarter last year. Non-GAAP diluted net EPS was reported at $0.83, falling within the anticipated range of $0.78 to $0.92 per share, but down from $0.86 in the prior-year period. The non-GAAP results exclude various after-tax adjustments totaling $179 million, which include costs related to restructuring, acquisitions, and other charges.

HP’s strong financial performance is further highlighted by its substantial net cash flow from operating activities, which amounted to $1.4 billion. The company generated free cash flow of $1.3 billion during the quarter. Asset management remained robust, with inventory levels decreasing to 67 days, while accounts payable decreased to 131 days. The company’s prudent cash management also saw $0.9 billion returned to shareholders through dividends and share repurchases, demonstrating HP’s commitment to delivering value to its investors.

On August 27, 2024, HP’s Board of Directors approved an increase in the share repurchase authorization to $10 billion. This decision aligns with HP’s strategy to enhance shareholder returns and reflect confidence in its ongoing financial health and market position.

HP’s CEO, Enrique Lores, expressed satisfaction with the company’s return to revenue growth and highlighted the successful launch of the next-generation AI PC lineup. Lores emphasized HP’s focus on long-term profitable growth and its commitment to navigating the dynamic business environment effectively.

Looking ahead, HP estimates a GAAP diluted net EPS range of $0.74 to $0.84 for the fourth quarter of fiscal 2024. Non-GAAP diluted net EPS is projected to be between $0.89 and $0.99, excluding $0.15 per share related to various charges. For the full fiscal year, HP anticipates GAAP diluted net EPS in the range of $2.62 to $2.72 and non-GAAP diluted net EPS between $3.35 and $3.45. The company expects to generate free cash flow of between $3 billion and $3.3 billion for the year.

In terms of segment performance, HP’s Personal Systems division reported revenue of $9.4 billion, up 5% year-over-year, driven by an 8% increase in Commercial Personal Systems revenue, despite a 1% decline in Consumer Personal Systems revenue. The Printing segment, however, saw a 3% decline in revenue to $4.1 billion, with a decrease in Commercial Printing revenue offsetting a 2% increase in Consumer Printing revenue.

Overall, HP Inc.’s fiscal 2024 third quarter results reflect a strong return to revenue growth, strategic investments in innovation, and a significant boost to shareholder returns. With a substantial increase in share repurchase authorization and a positive outlook for the remainder of the fiscal year, HP is well-positioned for continued growth and value creation.