HP Inc (NYSE:HPQ) reported third-quarter revenue and profit that beat analyst estimates and raised its full-year forecast, but shares fell 10.5% as investors weighed the results against expectations.
The personal computer and printer maker posted revenue of $15.7 billion for the quarter, up 12.5% from a year earlier and above the $14.38 billion analysts had estimated.
Adjusted earnings came in at $0.83 per share, topping the $0.69 estimate and up 11% year-over-year. Free cash flow reached $1.6 billion, far exceeding the $597 million forecast.
HP raised its full-year adjusted earnings guidance to a range of $3.19 to $3.29 per share, above the $3.04 analysts had projected. The company also lifted its free cash flow outlook to $3 billion to $3.2 billion, compared with estimates of $2.89 billion. GAAP earnings per share are now expected to range from $2.52 to $2.62.
For the fourth quarter, HP guided adjusted earnings per share of $0.69 to $0.79, above the $0.67 estimate, with GAAP earnings per share expected between $0.74 and $0.84.
By segment, Personal Systems revenue rose 18% year-over-year to $11.8 billion, while Printing revenue fell 2% to $3.9 billion.
GAAP operating margin was 5.7%, up 0.6 percentage points from a year earlier, while non-GAAP operating margin declined 0.6 percentage points to 6.5%. Net cash provided by operating activities totaled $1.7 billion.
The company returned $0.6 billion to shareholders during the quarter, including $300 million in share repurchases and a dividend of $0.30 per share.
"In the third quarter we increased both total sales and share in premium products and continued to attract new customers with innovations in WXP, Print, workstations and AI PCs. Our ongoing strategy to address environmental constraints led to meaningful improvements in memory supply and higher fulfillment rates," said Bruce Broussard, Interim CEO, HP Inc (NYSE:HPQ).
"The strong foundation we are building as a trusted edge platform positions us well to lead as AI evolves and allows us to help customers improve their AI economics, security, latency and governance."
