🖨️ HP Inc.’s Earnings Report: A Neutral Analysis


HP Inc.’s Q4 FY23 earnings report presents a multifaceted view of the company’s current financial state and its prospects. The reported net revenue of $13.8 billion represents a 6% decrease year-over-year (YoY), mirroring a similar trend in the full-year revenue of $53.7 billion, a 15% decline compared to the previous year. These figures reflect the ongoing challenges within the broader market.

  1. Resilient Financial Performance in a Challenging Market: Despite a 6% year-over-year decline in net revenue in Q4 FY23 and a 15% decrease in FY23, HP Inc. demonstrated financial resilience. The company’s Non-GAAP diluted net earnings per share (EPS) of $0.90 for Q4 and $3.28 for FY23 aligned closely with its forecasts, indicating effective financial management and stability in a volatile market.
  2. Strategic Focus on Growth Areas: HP Inc. has strategically targeted key growth sectors like Hybrid Systems, Gaming, and Workforce Solutions, which showed significant growth. This focus not only offsets the broader market challenges but also positions HP favorably for future innovation and market leadership, especially in emerging technology domains.
  3. Commitment to Sustainability and Social Responsibility: HP’s initiatives in sustainable practices, such as the HP PC refurbishment program and human rights awareness programs, reflect a strong commitment to corporate social responsibility. These efforts not only enhance HP’s brand image but also align with the growing global emphasis on ethical business practices and environmental sustainability.

The Non-GAAP diluted net earnings per share (EPS) for Q4 stood at $0.90, within the projected range, and $3.28 for FY23, closely aligning with the company’s earlier forecasts. This outcome suggests a degree of financial stability despite the declining revenues.

In terms of operational profitability, HP’s Personal Systems segment reported an operating profit of $631 million in Q4, while the Printing segment reported $836 million. These figures indicate an effective management of operational costs and a continued focus on profitability in core business areas.

HP has also emphasized its commitment to sustainable practices and social responsibility, with initiatives like the HP PC refurbishment program and various human rights awareness programs. These efforts reflect the company’s broader corporate responsibility goals beyond its financial objectives.

“Key growth areas collectively grew revenue 10% q/q two times faster than total revenue. Non-GAAP diluted Net EPS and Operating Profit up y/y and q/q. Delivered $1.9B of free cash flow.”

Looking ahead to FY24, HP projects a GAAP diluted net EPS between $2.68 and $3.08, and a Non-GAAP diluted net EPS between $3.25 and $3.65. The forecasted free cash flow ranges from $3.1 billion to $3.6 billion, indicating a cautiously optimistic outlook for the upcoming fiscal year. These projections are set against the backdrop of HP’s strategic pivots and cost management efforts.

The company has faced and continues to confront significant market challenges. The past year’s revenue decline highlights the impact of external market forces on HP’s operations. However, the company’s ability to maintain financial stability in terms of EPS and operational profits, coupled with its forward-looking projections, suggest a resilience in its business model. HP’s future success will likely hinge on its continued adaptability to market dynamics, effective cost management, and strategic focus on growth areas, while also upholding its commitments to sustainability and social responsibility.

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Greg Walters, Head Writer