HP reports Q2 results

HP has announced its fiscal 2024 second quarter net revenue of $12.8 billion, down 0.8 percent (down 1.2 percent in constant currency) from the prior-year period.

“We delivered a solid quarter and first half, and unveiled an innovative portfolio of solutions designed for the AI and hybrid era” said Enrique Lores, President and CEO, HP Inc. “We have a clear strategy and are well positioned to drive profitable growth across our business.”

Second quarter GAAP diluted net EPS was $0.61, down from $1.06 in the prior-year period and within the previously provided outlook of $0.58 to $0.68. Second quarter non-GAAP diluted net EPS was $0.82, up from $0.79 in the prior-year period and within the previously provided outlook of $0.76 to $0.86. Second quarter non-GAAP net earnings and non-GAAP diluted net EPS excludes after-tax adjustments of $205 million, or $0.21 per diluted share, related to restructuring and other charges, acquisition and divestiture charges, amortisation of intangible assets, non-operating retirement-related credits and tax adjustments.

Asset Management

HP's net cash provided by operating activities in the second quarter of fiscal 2024 was $581 million. Accounts receivable ended the quarter at $4.3 billion, up 5 days quarter over quarter to 31 days. Inventory ended the quarter at $7.5 billion, up 9 days quarter over quarter to 70 days. Accounts payable ended the quarter at $14.4 billion, up 16 days quarter over quarter to 132 days.

HP generated $481 million of free cash flow in the second quarter. Free cash flow includes net cash provided by operating activities of $581 million adjusted for net investments in leases of $19 million and net investments in property, plant and equipment of $119 million.

HP’s dividend payment of $0.2756 per share in the second quarter resulted in cash usage of $0.3 billion. HP also utilised $0.1 billion of cash during the quarter to repurchase approximately 3.5 million shares of common stock in the open market. HP exited the quarter with $2.5 billion in gross cash, which includes cash and cash equivalents of $2.4 billion, restricted cash of $75 million, and short-term investments of $3 million included in other current assets. Restricted cash relates to amounts collected and held on behalf of a third party for trade receivables previously sold.

Fiscal 2024 second quarter segment results

• Personal Systems net revenue was $8.4 billion, up 3 percent year over year (up 2 percent in constant currency) with a 6.0 percent operating margin. Consumer PS net revenue was down 3 percent and Commercial PS net revenue was up 6 percent. Total units were up 7 percent with Consumer PS units down 1 percent and Commercial PS units up 12 percent.

• Printing net revenue was $4.4 billion, down 8 percent year over year (down 7 percent in constant currency) with a 19.0 percent operating margin. Consumer Printing net revenue was down 16 percent and Commercial Printing net revenue was down 12 percent. Supplies net revenue was down 5 percent (down 4 percent in constant currency). Total hardware units were down 17 percent, with Consumer Printing units down 17 percent and Commercial Printing units down 17 percent.