HP reports mixed results
November 27, 2024
Revenue rises but future uncertainty clouds HP’s fiscal 2024 performance.
HP Inc. reported a mixed set of fiscal 2024 results, with revenue growth providing a glimmer of optimism even as weaker guidance for the coming quarter dampened investor confidence.
The company posted a 1.7% increase in revenue for the fourth quarter, reaching $14.1 billion (€12.9 billion), exceeding analyst expectations of $14.0 billion (€12.8 billion). This was buoyed by a long-awaited recovery in its printing division, which saw a 1% increase in revenue to $4.5 billion (€4.1 billion). However, HP’s earnings per share (EPS) forecast for the next quarter fell short of expectations.
HP’s printing business, which accounts for nearly a third of its revenue, reversed an 11-quarter streak of declines. The segment outperformed Wall Street estimates of $4.2 billion (€3.9 billion), supported by stronger commercial sales and increased market share. Unit sales also grew during the period, reflecting the success of recent cost-cutting measures and product enhancements.
Despite this resurgence, HP’s consumer-facing operations painted a less rosy picture. Revenue from consumer markets dropped 9% year-on-year, highlighting the continuing challenge of waning demand in personal systems such as laptops and desktops.
“We are pleased with our Q4 performance where we saw revenue growth for the second consecutive quarter, driven by steady progress in Personal Systems and Print,” said Enrique Lores, HP President and CEO. “With momentum heading into FY25, we are well-positioned to capitalise on the commercial opportunity and lead the future of work.”
“In FY24 we drove non-GAAP EPS and free cash flow growth which allowed us to return approximately $3.2 billion to shareholders,” said Karen Parkhill, HP CFO. “As we look ahead, we are well positioned to deliver solid growth across revenue, non-GAAP net earnings, EPS and free cash flow in FY25. And given our confidence in the future, we are raising our annual dividend by 5 percent.”
The company’s future guidance raised eyebrows. HP projected adjusted EPS of 73 cents (€0.67) for the first quarter of fiscal 2025, significantly below the analyst consensus of 85 cents (€0.78). Investors reacted swiftly, sending the stock down 8% in after-hours trading.
Commercial markets offered a silver lining, with revenue rising 7% year-on-year, fuelled by robust demand for enterprise-focused products. However, analysts warn that HP’s dependence on cyclical sectors such as corporate IT spending could leave it vulnerable to macroeconomic pressures.
Categories : City News
Tags : Business Financials HP Inc OEM Printing Segment Sales
