HP Reports Q4 Earnings, Shares Plunge on Weak Guidance
HP Inc reported its fiscal fourth-quarter earnings, beating Wall Street expectations, but the company’s guidance for the current quarter fell short, sending its stock plummeting by over 8%. The company’s shares closed lower on Wednesday after the report.
In its quarterly earnings report, HP announced adjusted earnings per share (EPS) of $0.93 on revenue of $14.1 billion, exceeding analysts’ estimates of $0.93 on revenue of $13.99 billion. Personal systems, which includes personal computers, saw a 9% year-over-year increase in net revenue, while printing net revenue rose 1% and personal systems revenue rose 2%.
However, HP’s guidance for the current quarter fell short of analysts’ estimates, with the company forecasting adjusted EPS in the range of $0.70 to $0.76, compared to analyst estimates of $0.86. The company also guided adjusted EPS for fiscal 2025 in the range of $3.45 to $3.75 and expects to generate free cash flow in the range of $3.2 billion to $3.6 billion.
Bernstein analysts noted that HP’s guidance points to an “unusually back-half loaded year, which appears predicated on continued strong IPG margins and strong PC growth/upgrade cycle.” Morgan Stanley analysts also voiced similar comments, noting that the company’s full-year guide is in-line with estimates, but the Q1 outlook is sub-seasonal, making 2025 a more back-half loaded year than ever before.
Despite the disappointing guidance, HP hiked its dividend by 5% to $0.2894 per share.
