HP Inc. Reports Fiscal 2017 Third Quarter Results

HP Inc. Reports Fiscal 2017 Third Quarter ResultsHP Inc.'s fiscal 2017 third quarter financial performance

PALO ALTO, CA - (GlobeNewswire) - August 23, 2017 - HP (NYSE: HPQ)

Third quarter net revenue of $13.1 billion, up 10% as reported and up 11% in constant currency from the prior-year period

Third quarter GAAP diluted net earnings per share from continuing operations of $0.41, above the previously provided outlook of $0.36 to $0.40 per share

Third quarter non-GAAP diluted net earnings per share of $0.43, within the previously provided outlook of $0.40 to $0.43 per share

Third quarter cash provided by operating activities of $1.8 billion

Third quarter returned $524 million to shareholders in the form of share repurchases and dividends

HP Inc.'s fiscal 2017 third quarter financial performance

Q3 FY17

Q3 FY16

Y/Y

GAAP net revenue ($B)

$13.1

$11.9

10%

GAAP operating margin from continuing operations

7.3%

9.4%

(2.1 pts)

GAAP net earnings from continuing operations ($B)

$0.7

$0.8

(17%)

GAAP diluted net earnings per share from continuing operations

$0.41

$0.49

(16%)

Non-GAAP operating margin

7.7%

9.4%

(1.7 pts)

Non-GAAP net earnings ($B)

$0.7

$0.8

(11%)

Non-GAAP diluted net earnings per share

$0.43

$0.48

(10%)

Cash provided by operating activities ($B)

$1.8

$1.1

66%

Notes to table

Information about HP Inc.s use of non-GAAP financial information is provided under Use of non-GAAP financial information below.

Net revenue and EPS results

HP Inc. ( HP ) announced third quarter net revenue of $13.1 billion, up 10% as reported and up 11% in constant currency from the prior-year period. Third quarter GAAP diluted net earnings per share ( EPS ) from continuing operations was $0.41, down from $0.49 in the prior-year period and above the previously provided outlook of $0.36 to $0.40. Third quarter non-GAAP diluted net EPS was $0.43, down from $0.48 in the prior-year period and within the previously provided outlook of $0.40 to $0.43. Third quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax adjustments of $39 million, or $0.02 per share, related to restructuring and other charges, acquisition-related charges, defined benefit plan settlement charges, amortization of intangible assets, non-operating retirement-related credits/(charges) and net tax indemnifications.

Q3 was another outstanding quarter of successfully executing our reinvention strategy, said Dion Weisler, President and CEO, HP Inc. We stabilized supplies revenue a quarter earlier than expected, posted double-digit revenue growth, delivered non-GAAP earnings per share at the high end of our previously provided outlook range and generated approximately $1.7 billion in free cash flow.

Asset management

HP's cash provided by operating activities in the third quarter was $1.8 billion. Accounts receivable ended the quarter at $4.2 billion, up 2 days quarter over quarter to 29 days. Inventory ended the quarter at $5.2 billion, up 1 day quarter over quarter to 44 days. Accounts payable ended the quarter at $12.8 billion, up 8 days quarter over quarter to 108 days. HP's dividend payment of $0.1327 per share in the third quarter resulted in cash usage of $0.2 billion. HP also utilized $0.3 billion of cash during the quarter to repurchase approximately 16.2 million shares of common stock in the open market. HP exited the quarter with $8.0 billion in gross cash, which includes cash and cash equivalents and short-term investments of $1.0 billion included in other current assets.

Fiscal 2017 third quarter segment results

Personal Systems net revenue was up 12% year over year (up 13% in constant currency) with a 3.7% operating margin. Commercial net revenue increased 11% and Consumer net revenue increased 14%. Total units were up 7% with Notebooks units up 12% and Desktops units down 3%.

Printing net revenue was up 6% year over year (up 7% in constant currency) with a 17.3% operating margin. Total hardware units were up 1% with Commercial hardware units flat and Consumer hardware units up 1%. Supplies net revenue was up 10% (up 10% in constant currency).

Outlook

For the fiscal 2017 fourth quarter, HP estimates GAAP diluted net EPS from continuing operations to be in the range of $0.37 to $0.41 and non-GAAP diluted net EPS to be in the range of $0.42 to $0.45. Fiscal 2017 fourth quarter non-GAAP diluted net EPS estimates exclude $0.04 to $0.05 per diluted share, primarily related to restructuring and other charges, acquisition-related charges, defined benefit plan settlement charges, amortization of intangible assets, non-operating retirement-related credits/(charges), net tax indemnifications, net valuation allowances and discontinued operations.

For fiscal 2017, HP raises the midpoint of GAAP diluted net EPS from continuing operations and non-GAAP diluted net EPS. HP estimates GAAP diluted net EPS from continuing operations to be in the range of $1.46 to $1.50 and non-GAAP diluted net EPS to be in the range of $1.63 to $1.66. Fiscal 2017 non-GAAP diluted net EPS estimates exclude $0.16 to $0.17 per diluted share, primarily related to restructuring and other charges, acquisition-related charges, defined benefit plan settlement charges, amortization of intangible assets, non-operating retirement-related credits/(charges), net tax indemnifications, net valuation allowances and discontinued operations.

More information on HPs earnings, including additional financial analysis and an earnings overview presentation, is available on HPs Investor Relations website at www.hp.com/investor/home.

HPs FY17 Q3 earnings conference call is accessible via an audio webcast at www.hp.com/investor/2017Q3Webcast.

About HP Inc.

HP Inc. creates technology that makes life better for everyone, everywhere. Through our portfolio of printers, PCs, mobile devices, solutions, and se

LINK:	http://www8.hp.com/us/en/hp-news/press-release.html?id=2510008...
	See more stories from hp

Most recent headlines