Post Earnings Coverage as HP’s Quarterly Revenue Grew 5% on Constant Currency Basis; Adjusted EPS Gained 6%

Upcoming AWS Coverage on Diebold Nixdorf Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 10, 2017 / Active Wall St. announces its post-earnings coverage on HP Inc. (NYSE: HPQ). The Company posted its first quarter fiscal 2017 financial results on February 22, 2017. The personal computer and printer maker outperformed top- and bottom-line expectations. Moreover, the Company returned $613 million to stockholders during the reported quarter. Register with us now for your free membership at:

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One of HP Inc.’s competitors within the Diversified Computer Systems space, Diebold Nixdorf Inc. (NYSE: DBD), reported its 2016 fourth quarter and full year financial results on February 14, 2017. AWS will be initiating a research report on Diebold Nixdorf in the coming days.

Today, AWS is promoting its earnings coverage on HPQ; touching on DBD. Get our free coverage by signing up to:

http://www.activewallst.com/register/

Earnings Reviewed

For the three months ended January 31st, 2017, HP announced net revenue of $12.68 billion, up 4% or 5% in constant currency from the prior-year same period net revenue of $12.2 billion. The Company’s reported numbers smashed past analysts’ consensus of $11.77 billion.

HP’s Q1 FY17 GAAP diluted net earnings per share (“EPS”) from continuing operations was $0.36, flat from the prior year comparable period and within the previously provided outlook of $0.33 to $0.36. The Company’s Q1 FY17 non-GAAP diluted net EPS was $0.38, up from $0.36 in the prior year corresponding period and within the previously provided outlook of $0.35 to $0.38. First quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax adjustments of $35 million, or $0.02 per share, related to restructuring and other charges, acquisition-related charges, non-operating retirement-related credits / (charges), and net tax indemnifications. HP’s non-GAAP EPS surpassed market expectations of $0.37 per share.

Segment results

During Q1 FY17, HP’s Personal Systems net revenue was up 10% y-o-y, or 11% in constant currency, to $8.22 billion with a 3.8% operating margin. Commercial net revenue increased 7% and Consumer net revenue increased 15%. Total units were up 8% with Notebooks units up 12% and Desktops units flat.

The Company’s Printing net revenue declined 3% on a y-o-y basis, or 2% in constant currency, to $4.48 billion with a 16.0% operating margin. Total hardware units were up 6% with Commercial hardware units up 2% and Consumer hardware units up 7%. Supplies net revenue was down 3% (down 2% in constant currency).

Asset management

HP’s receivable ended the reported quarter at $3.5 billion, down 5 days q-o-q to 25 days. Inventory ended the quarter at $4.6 billion, unchanged q-o-q at 39 days. Accounts payable ended the quarter at $11.0 billion, down 4 days compared to Q3 2016 to 94 days. HP’s dividend payment of $0.1327 per share in Q1 FY17 resulted in cash usage of $0.2 billion. HP also utilized $0.4 billion of cash during the reported quarter to repurchase approximately 25.5 million shares of common stock in the open market.

HP exited the quarter with $6.3 billion in gross cash, which includes cash and cash equivalents, short-term investments, and certain liquid long-term investments.

HP’s cash flow from operations was $767 million, and free cash flow was $735 million. Free cash flow was better than the Company’s expectation, due to the very strong performance of personal systems, and the material improvement in linearity in the quarter. During the reported quarter, HP had a total capital return of $613 million through share repurchases and cash dividends, which was 83% of free cash flow as compared to its full year target of 50% to 75%.

Outlook

For Q2 FY17, HP estimates GAAP diluted net EPS from continuing operations to be in the range of $0.32 to $0.35 and non-GAAP diluted net EPS to be in the range of $0.37 to $0.40.

Stock Performance

On Thursday, March 09, 2017, the stock closed the trading session at $17.36, slightly up by 0.23% from its previous closing price of $17.32. A total volume of 8.51 million shares have exchanged hands. HP Inc.’s stock price rallied 13.38% in the last month, 13.09% in the past three months, and 21.17% in the previous six months. Furthermore, since the start of the year, shares of the Company have surged 17.88%. The stock is trading at a PE ratio of 11.41 and has a dividend yield of 3.05%.

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