Earnings Up for HP’s Third Quarter, But Printer Revenue Down

HP Inc. today announced third-quarter net revenue of $14.6 billion, up 0.1 percent versus the prior-year period.

Third-quarter earnings per share (EPS) was $0.78, up from $0.54 in the prior-year period and above HP’s previously provided outlook of $0.49 to $0.52. Third-quarter net earnings were $1.2 billion, up 34 percent versus the prior-year period.

“We continued to deliver strong free cash flow and non-GAAP EPS growth, while raising our non-GAAP EPS outlook,” said Dion Weisler, HP’s president and CEO. “We are delivering industry leading innovation across our portfolio, and I am confident we are taking the right actions to position HP for the future.”

HP’s net cash provided by operating activities in the third quarter of fiscal 2019 was $2.3 billion.  HP generated $2.2 billion of free cash flow in the third quarter.

Third-Quarter Segment Results

  • Printing net revenue was down 5 percent year-over-year to $4,912 million, with a 15.6 percent operating margin. Total hardware units were down 9 percent with Commercial hardware units down 4 percent and Consumer hardware units down 10 percent. Supplies net revenue was down 7 percent.
  • Personal Systems net revenue was up 3 percent year-over-year to $9,690 million with a 5.6 percent operating margin. Commercial net revenue increased 10 percent and Consumer net revenue decreased 11 percent. Total units were up 5 percent with Notebooks units up 2 percent and Desktops units up 11 percent.

For its Printing group, HP noted:

  • Continued revenue growth in contractual businesses, including Instant Ink and MPS.
  • HP’s 3D-printer business continues to expand, with, for instance, HP opening a 3D-printer center in Barcelona, Spain.
  • Among the group’s introductions this quarter was the HP Neverstop, the world’s first toner-tank printer, and which is designed for small businesses in emerging markets.
  • HP extended its JetIntelligence platform into its A3 portfolio.

Forecast

For its fiscal 2019 fourth quarter, HP estimates net EPS to be in the range of $0.51 to $0.55.

For fiscal 2019, HP is updating its estimate of net EPS to be in the range of $2.31 to $2.35 and revises its previous estimate of non-GAAP diluted net EPS to be in the range of $2.18 to $2.22.

A complete third-quarter presentation is available here.

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