HP Unveils Q1 2024 Financials: A Promising Start to the Year

HP Inc. reports Q1 2024 fiscal results with a 4.4% decrease in net revenue and a 4.9% decrease in constant currency, while GAAP and non-GAAP diluted net EPS increase.

HP's GAAP diluted net EPS saw an increase from $0.47 to $0.62, surpassing the previously provided outlook of $0.60 to $0.70.
HP's non-GAAP diluted net EPS also experienced growth, rising from $0.73 to $0.81.
HP's commitment to innovation and disciplined execution across all aspects of the business contributed to solid earnings growth during this quarter.

HP Inc., the technology company and its subsidiaries, recently announced their fiscal 2024 first quarter financial results. The net revenue for the quarter stood at $13.2 billion, which is a 4.4% decrease compared to the same period last year (or a 4.9% decrease in constant currency). However, despite the decline in revenue, HP’s GAAP diluted net EPS (earnings per share) saw an increase from $0.47 to $0.62, surpassing the previously provided outlook of $0.60 to $0.70. Similarly, the non-GAAP diluted net EPS also experienced growth, rising from $0.73 to $0.81.

It’s important to note that the non-GAAP net earnings and non-GAAP diluted net EPS figures exclude certain after-tax adjustments, such as restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, and tax adjustments.

Enrique Lores, HP’s President and CEO, expressed his satisfaction with the company’s first quarter results, emphasizing their progress in executing their Future Ready plan. Lores highlighted HP’s commitment to innovation and disciplined execution across all aspects of the business, which contributed to solid earnings growth during this quarter. He also expressed confidence in HP’s ability to accelerate as the market recovers.

In terms of asset management, HP generated $121 million in net cash provided by operating activities for the first quarter of fiscal 2024. The accounts receivable for the quarter amounted to $3.8 billion, representing a decrease of 2 days quarter over quarter to 26 days. On the other hand, inventory increased by 4 days quarter over quarter to 61 days, reaching $6.9 billion. Accounts payable decreased by 1 day quarter over quarter to 116 days, amounting to $13.3 billion.

HP reported $25 million of free cash flow for the first quarter, which includes net cash provided by operating activities of $121 million adjusted for net investments in leases of $62 million and net investments in property, plant, and equipment of $158 million.

During the first quarter, HP utilized $0.3 billion in cash for dividend payments, amounting to $0.2756 per share. Additionally, the company repurchased approximately 16.7 million shares of common stock in the open market, resulting in a cash usage of $0.5 billion. HP ended the quarter with $2.4 billion in gross cash, including cash and cash equivalents of $2.3 billion, restricted cash of $154 million, and short-term investments of $3 million.

Analyzing the segment results for the first quarter of fiscal 2024, HP’s Personal Systems net revenue reached $8.8 billion, experiencing a 4% decline year over year (or a 5% decline in constant currency). The operating margin for this segment was 6.1%. Consumer PS net revenue decreased by 1%, while Commercial PS net revenue declined by 5%. However, the total units sold increased by 5%, driven by a 10% growth in Consumer PS units and a 2% growth in Commercial PS units.

In the Printing segment, net revenue amounted to $4.4 billion, down 5% year over year (or a 5% decline in constant currency). The operating margin for this segment was 19.9%. Consumer Printing net revenue experienced a significant decline of 22%, while Commercial Printing net revenue dropped by 12%. However, Supplies net revenue remained flat (or up 1% in constant currency). The total hardware units sold in the Printing segment decreased by 17%, with Consumer Printing units down 15% and Commercial Printing units down 18%.

Looking ahead, HP provided its outlook for the fiscal 2024 second quarter. The company estimates GAAP diluted net EPS to be in the range of $0.58 to $0.68, while non-GAAP diluted net EPS is projected to be in the range of $0.76 to $0.86. The non-GAAP estimates exclude $0.18 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items.

For the full fiscal year 2024, HP anticipates GAAP diluted net EPS to be within the range of $2.61 to $3.01, with non-GAAP diluted net EPS expected to fall between $3.25 and $3.65. The non-GAAP estimates exclude $0.64 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items. Additionally, HP projects generating free cash flow between $3.1 billion and $3.6 billion for fiscal 2024.

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Background Information

About HP:

Founded by Bill Hewlett and Dave Packard in a garage in 1939, HP (Hewlett-Packard) is a global technology giant known for its pioneering innovations in computing and printing technology. With a legacy of over eight decades, HP has consistently delivered a wide range of high-quality products and services, including personal computers, printers, servers, and software solutions.