HP Inc. Reports Mixed Results and Cautious Outlook


HP Inc.’s stock experienced an initial decline of over 6% in extended trading on Tuesday after the company released its quarterly results and provided a cautious outlook. In an interview, HP Chief Executive Enrique Lores stated that although they anticipate sequential growth in the fourth quarter, the external environment has not improved as quickly as expected, leading them to moderate their expectations.

For the upcoming fourth quarter, HP is projecting adjusted earnings of 85 cents to 97 cents per share, while analysts polled by FactSet have forecasted 95 cents per share. Lores highlighted that PC pricing has not rebounded as swiftly as anticipated in what he described as a challenging economy. Despite this, he expressed optimism that the introduction of AI products in late 2024 will invigorate consumer and business sales.

In terms of financial performance, HP reported fiscal third-quarter net earnings of $766 million, or 76 cents per share, compared to $1.12 billion, or $1.08 per share, in the year-ago quarter. Adjusted earnings for the quarter were reported at 86 cents per share. The company’s revenue also declined by 10%, amounting to $13.2 billion in comparison to $14.65 billion in the same period last year. This marks the third consecutive quarter in which HP fell short of analysts’ revenue estimates. The average net earnings projected by analysts surveyed by FactSet were 86 cents per share on revenue of $13.4 billion.

HP’s stock has demonstrated a 17% increase this year, aligning with the S&P 500 index’s gain of 17%. Analyst Daniel Newman, CEO of the Futurum Group, noted that HP’s results shed light on the divide between AI and other aspects of technology. While the company has made notable sequential gains, it is still grappling with macroeconomic softness that is likely to persist as tech investment pivots towards AI. Additionally, the monetization of on-device AI is expected to have a longer path to clarity.

Key Details:

  • HP Inc. reports mixed results and offers a cautious outlook.
  • PC pricing has not recovered as quickly as anticipated in a challenging economy.
  • Introduction of AI products in late 2024 expected to refresh consumer and business sales.
  • Net earnings for the fiscal third quarter were $766 million, or 76 cents per share.
  • Revenue declined by 10% to $13.2 billion compared to the same period last year.
  • HP fell short of analysts’ revenue estimates for the third consecutive quarter.
  • HP’s stock has seen a 17% increase this year alongside the S&P 500 index.
  • Analyst highlights the divergence between AI and other aspects of tech.
  • Monetization of on-device AI expected to take longer to clarify.
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