HP First Quarter results released

HP recently announced fiscal 2023 first quarter results, net revenue of $13.8 billion,  down 18.8% (down 14.7% in constant currency) from the prior-year period.

Highlights:

The first quarter GAAP diluted net earnings per share ("EPS") of $0.49, within the previously provided outlook of $0.47 to $0.57 per share

• First quarter non-GAAP diluted net EPS of $0.75, within the previously provided outlook of $0.70 to $0.80 per share
• First quarter net revenue of $13.8 billion, down 18.8% from the prior-year period
• First quarter net cash used in operating activities of $(16) million, free cash flow of $(0.2) billion
• The first quarter returned $0.4 billion to shareholders in the form of share repurchases and dividends

Net revenue and EPS results

 “We delivered on our non-GAAP EPS target despite industry-wide headwinds, reflecting disciplined execution across our business,” said Enrique Lores, HP President and CEO. “The Future Ready plan we announced last quarter is having an immediate impact as we continue to reduce our costs while maintaining investments in long-term growth.”
 

The first quarter GAAP diluted net EPS was $0.49, down from $0.99 in the prior-year period and within the previously provided outlook of $0.47 to $0.57. The first quarter non-GAAP diluted net EPS was $0.75, down from $1.10 in the prior-year period and within the previously provided outlook of $0.70 to $0.80. First quarter non-GAAP net earnings and non-GAAP diluted net EPS excludes after-tax adjustments of $262 million, or $0.26 per diluted share, related to restructuring and other charges, acquisition and divestiture related charges, amortisation of intangible assets, debt extinguishment costs, non-operating retirement-related (credits)/charges, and tax adjustments.

Asset Management

HP's net cash in operating activities in the first quarter of fiscal 2023 was $(16) million. Accounts receivable ended the quarter at $4.3 billion, flat quarter over quarter at 28 days. Inventory ended the quarter at $7.3 billion, up three days quarter over quarter to 60 days. Accounts payable ended the quarter at $13.5 billion, down four days quarter over quarter to 110 days.

HP generated $(0.2) billion of free cash flow in the first quarter. Free cash flow includes net cash used in operating activities of $(16) million adjusted for net investments in leases of $16 million and net investments in property, plant and equipment of $192 million.

HP’s dividend payment of $0.2625 per share in the first quarter resulted in cash usage of $0.3 billion. HP also utilised $0.1 billion of cash during the quarter to repurchase approximately 3.6 million shares of common stock in the open market. HP exited the quarter with $1.8 billion in gross cash, which includes cash, cash equivalents and restricted cash, and short-term investments of $18 million included in other current assets. Cash, cash equivalents, and restricted cash include $364 million of restricted cash related to amounts collected and held on behalf of a third party for trade receivables previously sold.

Fiscal 2023 first quarter segment results

• Personal Systems net revenue was $9.2 billion, down 24% year over year (down 20% in constant currency) with a 5.4% operating margin. Consumer PS net revenue decreased by 36%, and Commercial PS net revenue decreased by 18%. Total units were down 28%, with Consumer PS units down 33% and Commercial PS units down 24%.
   
• Printing net revenue was $4.6 billion, down 5% year over year (down 2% in constant currency), with an 18.9% operating margin. Consumer Printing net revenue was down 3%, and Commercial Printing net revenue was up 2%. Supplies net revenue was down 7% (6% in constant currency). Total hardware units were up 2% overall, with Consumer Printing units up 3% and Commercial Printing units down 8%.