HP Inc. (NYSE:HPQ) Goldman Sachs Communacopia + Technology Conference September 9, 2024 1:50 PM ET Company Participants Enrique Lores - CEO Conference Call Participants Michael Ng - Goldman Sachs Michael Ng Great. Well, welcome to the HP Inc. fireside chat at the Goldman Sachs Communacopia and Technology Conference. I have the privilege of introducing Enrique Lores, CEO of HP. Enrique has been in HP for nearly 35 years. And prior to taking over as CEO in 2019, he served as President of the Printing business ...

Shares of the computer and printer company rallied on optimism for AI PCs and cost cuts.Shares of HP (HPQ 2.42%) were rallying in Thursday trading, up as much as 6.1% before settling into a 3.8% gain as of 1:24 p.m. ET.After Hewlett-Packard split into two companies, HP Inc. now handles the low-growth businesses of PCs and printers/ink. And the growth challenges were on display when the company released earnings last night.Still, the stock rallied today on optimism that artificial intelligence (AI) PCs will ...

wellesenterprisesHP stock: previous thesis and FY Q3 recap I last wrote on HP Inc. (NYSE:HPQ) about four months ago. As you can see from the screenshot below, that article was titled "HP Inc.: Buy Cyclical Stocks Near Cyclical Lows" and was published at Seeking Alpha on April 26, 2024. The title already gave the thesis away, which recommends a buy rating judging by the status of the cycle. Quote: To conclude, my final verdict is that the upside potential outweighs the downside risks. As such, I rate HPQ ...

HP (HPQ) reported $13.52 billion in revenue for the quarter ended July 2024, representing a year-over-year increase of 2.5%. EPS of $0.83 for the same period compares to $0.86 a year ago.The reported revenue represents a surprise of +1.29% over the Zacks Consensus Estimate of $13.35 billion. With the consensus EPS estimate being $0.86, the EPS surprise was -3.49%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next ...

HP Inc.’s (HPQ) third-quarter fiscal 2024 non-GAAP earnings of 83 cents per share missed the Zacks Consensus Estimate of 86 cents. The bottom line declined 3.5% year over year and came within the company’s guidance of 78-92 cents. The decline in the bottom line was due to competitive pricing and higher commodity costs.HPQ’s net revenues of $13.5 billion surpassed the Zacks Consensus Estimate of $13.35 billion. The figure improved 2.4% from the prior-year quarter’s level of $13.2 billion. The better-than-exp ...

About this content About Jamie Ashcroft Jamie Ashcroft, the News Editor for Proactive UK, has developed an impressive career in financial journalism, focusing on the small-cap sector for over fourteen years. Before joining the Proactive team, he was a stockbroker during the global financial crisis, a role that complemented his educational background - a first-class degree in Business and Economics and qualifications in software design and development. As one of the early external hires at Proactive in 20 ...

Financial Data and Key Metrics - Revenue grew 2% YoY, marking the first revenue growth in nine quarters, driven by strong performance in Personal Systems [8] - Non-GAAP operating profit declined 7% YoY, and non-GAAP EPS was within the previously provided outlook range but below expectations [9] - Free cash flow was $1.3 billion in Q3, with $0.9 billion returned to shareholders through repurchases and dividends [20] - Personal Systems revenue increased 5% YoY, with operating profit at 6.4%, in line with expectations [17] - Print revenue declined 3% YoY, with operating profit at 17.3%, below expectations due to softer demand and aggressive pricing [19] Business Line Performance - Personal Systems saw growth in high-value categories, including workstations and consumer premium, with gaming revenue growing QoQ in line with seasonality [17] - Print business faced challenges with slower market recovery, particularly in China, but saw growth in home and office segments excluding China [19] - AI PC shipments are ramping up, with positive initial reactions, and the company expects AI PCs to represent 50% of shipments by 2027 [18][44] Market Performance - Americas, EMEA, and APJ regions each grew 3% in constant currency [25] - PC market recovery was strong, particularly in commercial segments, with enterprise growing close to 5% and government between 6% and 7% [50] - Print market share increased both YoY and sequentially, with momentum in industrial graphics and supplies [29] Company Strategy and Industry Competition - The company is accelerating its Future Ready program, aiming to achieve 80% of the three-year structural cost run-rate target by the end of 2024 [9] - Investments in AI and hybrid work experiences are central to the company's strategy, with a focus on delivering new AI experiences for customers [21] - The company is leveraging AI to reduce customer call times and improve deal quotes, with further cost reductions planned in the print business [30][32] Management Commentary on Operating Environment and Future Outlook - Management expects the PC commercial momentum to continue, but the print market recovery will remain slower than expected [20] - The company is moderating its expectations for Q4 and the full year, with non-GAAP EPS expected to be in the range of $3.35 to $3.45 for FY 2024 [35] - The competitive pricing environment, particularly in print, is expected to persist, with Japanese competitors benefiting from a weaker yen [47] Other Important Information - The company acquired Cybercore Technologies to strengthen its security expertise and enhance offerings [14] - HP received a $50 million award from the US Department of Commerce to modernize its microfluidics semiconductor fab in Corvallis, Oregon [15] - The company achieved a 27% reduction in value-chain greenhouse gas emissions in 2023 and a 62% reduction in single-use plastic packaging [16] Q&A Session Summary Question: Print Margins in Fiscal 2024 - Print margins were impacted by aggressive pricing and a challenging market environment, particularly in China [38] - The company expects Q4 print margins to improve due to seasonal strength and accelerated cost-saving actions [39] Question: AI PCs and Market Impact - AI PC adoption is expected to be faster in consumer segments, with next-gen AI PCs projected to represent 50% of shipments by 2027 [42][44] Question: Commercial PC Recovery - Commercial PC demand is recovering, with enterprise growing close to 5% and government between 6% and 7%, driven by aging installed bases and Windows 11 adoption [50][51] Question: Cost Savings and Reinvestment - The company is accelerating cost-saving initiatives to offset market challenges while maintaining investments in long-term growth areas [53] Question: Capital Allocation and Share Repurchases - The company increased its share repurchase authorization to $10 billion, reaffirming its commitment to returning 100% of free cash flow to shareholders [61] Question: Free Cash Flow and Future Ready Program - Free cash flow is expected to remain strong, with the Future Ready program's cash outlays estimated at $300 million for FY 2024 [69] Question: Print Hardware Strategy and KPIs - The company is placing profitable hardware units to gain market share, with Instant Ink revenue and subscribers continuing to grow [72][73] Question: Personal Systems Seasonality - Q4 Personal Systems revenue is expected to increase sequentially, though consumer weakness may result in less seasonal growth than historically [75] Question: Federal Government Business - Federal government business grew between 6% and 7% in Q3, with strong momentum expected to continue in the second half [80] Question: Windows 10 End-of-Life and Refresh Cycle - The majority of the commercial PC refresh cycle is still ahead, with momentum expected to continue leading up to Windows 10 end-of-life in 2025 [83]

Data courtesy of Print my Leg Earnings Announcement August 28, 2024 | Q3 FY24 Forward-looking Statements This presentation contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, they could affect the business and results of operations of HP Inc. and its consolidated subsidiaries ("HP") which may differ materially from those expressed orimplied by such forward-lo ...

HP (HPQ) came out with quarterly earnings of $0.83 per share, missing the Zacks Consensus Estimate of $0.86 per share. This compares to earnings of $0.86 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -3.49%. A quarter ago, it was expected that this personal computer and printer maker would post earnings of $0.81 per share when it actually produced earnings of $0.82, delivering a surprise of 1.23%.Over the last four quarters, ...

Financial Performance - Total net revenue for Q3 2024 was $13,519 million, a 2.4% increase from $13,196 million in Q3 2023[12] - Gross margin for Q3 2024 was $2,906 million, compared to $2,822 million in Q3 2023, reflecting a gross margin increase of 2.9%[12] - Net earnings for Q3 2024 were $640 million, down 16.4% from $766 million in Q3 2023[12] - Earnings from operations for Q3 2024 were $940 million, slightly down from $952 million in Q3 2023[12] - The diluted net earnings per share for Q3 2024 were $0.65, compared to $0.76 in Q3 2023, a decrease of 14.5%[12] - The company reported a comprehensive income of $557 million for Q3 2024, down from $780 million in Q3 2023[14] - Net earnings for the nine months ended July 31, 2024, were $1,869 million, a decrease of 18.3% compared to $2,289 million for the same period in 2023[21] - For the three months ended July 31, 2024, net revenue was $13,519 million, an increase from $13,196 million for the same period in 2023, representing a growth of 2.4%[109] - Net earnings for the three months ended July 31, 2024, were $640 million, compared to $766 million for the same period in 2023, representing a decrease of approximately 16.5%[134] Expenses and Costs - Research and development expenses increased to $413 million in Q3 2024, up from $354 million in Q3 2023, representing a 16.6% increase[12] - Total operating expenses for Q3 2024 were $1,966 million, compared to $1,870 million in Q3 2023, indicating a rise of 5.1%[12] - Stock-based compensation expense increased to $367 million for the nine months ended July 31, 2024, compared to $353 million in the prior year, reflecting a rise of 4.0%[21] - Selling, General and Administrative (SG&A) expenses increased by 7.8% for the three months ended July 31, 2024, amounting to $1.404 billion, primarily due to higher investments in personnel and market initiatives[167] - Interest and other net expenses for the three months ended July 31, 2024, were $(113) million, compared to $(16) million in 2023, showing a significant increase in expenses[109] Assets and Liabilities - Total current assets increased to $19,315 million as of July 31, 2024, up from $17,977 million on October 31, 2023, representing a growth of 7.4%[17] - Total liabilities increased to $39,451 million as of July 31, 2024, compared to $37,004 million on October 31, 2023, indicating a rise of 6.6%[17] - Long-term debt decreased to $8,229 million from $9,254 million, showing a reduction of 11.1%[17] - Cash, cash equivalents, and restricted cash decreased to $2,878 million at the end of the period from $3,232 million at the beginning, reflecting a decline of 10.9%[21] - Total current liabilities were $10.200 billion as of July 31, 2024, slightly down from $10.212 billion as of October 31, 2023[70] Shareholder Returns - The company repurchased $1,200 million of common stock during the nine months ended July 31, 2024[21] - Cash dividends paid were $523 million, with a dividend of $0.52 per common share[36] - HP returned $2.0 billion to shareholders in cash dividends of $0.8 billion and share repurchases of $1.2 billion during the nine months ended July 31, 2024[194] Strategic Initiatives - HP's Fiscal 2023 Plan includes efforts to drive growth through investments in people and improving product mix[9] - The company anticipates structural cost savings driven by operational efficiency and digital transformation initiatives[9] - HP plans to reduce global headcount by approximately 4,000 to 6,000 employees as part of the Future Ready Plan, expecting to incur pre-tax charges of approximately $1.0 billion, with about $0.7 billion related to labor costs[42] - HP's Future Ready Plan aims to enhance digital capabilities and operational efficiency, with an accelerated cumulative savings target for fiscal year 2024[157] Market Performance - Personal Systems segment net revenue reached $9,369 million, up from $8,932 million, representing a 4.9% year-over-year growth[36] - Printing segment net revenue was $4,143 million, a slight decrease from $4,263 million, reflecting a 2.8% decline year-over-year[36] - The Commercial PS segment generated $6,677 million in revenue, compared to $6,201 million, marking an increase of 7.7% year-over-year[36] - The company reported a balance of $581 million in product warranty liabilities at the end of the period, down from $706 million at the beginning, with accruals for warranties issued amounting to $524 million[150] Legal Matters - The company has ongoing litigation related to copyright levies in European countries, which may impact future cash flows and operations[136] - HP India is involved in ongoing customs duty disputes with the India Directorate of Revenue Intelligence, with potential liabilities totaling approximately $386 million[138] - HP has been named in multiple legal proceedings regarding supplies authentication protocols, with claims based on misleading consumer notifications and potential damages sought[140] - HP's litigation with Philips regarding patent infringement has resulted in a final determination by the ITC that no violation occurred, allowing HP to resume litigation in federal court[138] Tax and Compliance - HP's effective tax rate was 22.6% for the three months ended July 31, 2024, compared to 18.2% for the same period in 2023[54] - As of July 31, 2024, HP had gross unrecognized tax benefits of $1.2 billion, with up to $867 million potentially affecting the effective tax rate if realized[55] - The company expects a potential reduction of $21 million in existing gross unrecognized tax benefits within the next 12 months[55] Operational Challenges - The company anticipates continued macroeconomic challenges, including geopolitical conflicts and inflationary trends, which may impact demand for its products[156] - The Printing segment faces challenges from changing customer behaviors and competition from non-original supplies, impacting overall performance[155] - HP's operational strategies include optimizing sales coverage models and enhancing pricing strategies to address competitive pressures and market demands[155]