HP Inc. Reports Fiscal 2017 First Quarter Results

PALO ALTO, CA -- (Marketwired) -- Feb 22, 2017 -- HP (NYSE: HPQ)

  • First quarter GAAP diluted net earnings per share from continuing operations of $0.36, within the previously provided outlook of $0.33 to $0.36 per share
  • First quarter non-GAAP diluted net earnings per share of $0.38, within the previously provided outlook of $0.35 to $0.38 per share
  • First quarter net revenue of $12.7 billion, up 4% (up 5% in constant currency) from the prior-year period
  • First quarter net cash provided by operating activities of $0.8 billion
  • First quarter returned $613 million to shareholders in the form of share repurchases and dividends

                                                                            
HP Inc.'s fiscal 2017 first quarter financial performance                   
                                                                            
                                             Q1 FY17   Q1 FY16      Y/Y     
----------------------------------------------------------------------------
GAAP net revenue ($B)                       $   12.7  $   12.2           4% 
GAAP operating margin from continuing                                       
 operations                                      6.7%      7.6%   (0.9 pts) 
GAAP net earnings from continuing                                           
 operations ($B)                            $    0.6  $    0.7          (6)%
GAAP diluted net earnings per share from                                    
 continuing operations                      $   0.36  $   0.36           -  
Non-GAAP operating margin                        7.1%      7.5%   (0.4 pts) 
Non-GAAP net earnings ($B)                  $    0.6  $    0.6           -  
Non-GAAP diluted net earnings per share     $   0.38  $   0.36           6% 
Cash provided by operating activities ($B)  $    0.8  $   (0.1)         NM  
                                                                            

Notes to table
Information about HP Inc.'s use of non-GAAP financial information is provided under "Use of non-GAAP financial information" below.
NM - Not Meaningful

Net revenue and EPS results
HP Inc. ("HP") announced first quarter net revenue of $12.7 billion, up 4% (up 5% in constant currency) from the prior-year period.

First quarter GAAP diluted net earnings per share ("EPS") from continuing operations was $0.36, flat from the prior-year period and within the previously provided outlook of $0.33 to $0.36. First quarter non-GAAP diluted net EPS was $0.38, up from $0.36 in the prior-year period and within the previously provided outlook of $0.35 to $0.38. First quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax adjustments of $35 million, or $0.02 per share, related to restructuring and other charges, acquisition-related charges, non-operating retirement-related credits / (charges), and net tax indemnifications.

"In Q1, we delivered earnings at the high end of our outlook range with strong free cash flow, driven by relentless execution and innovation," said Dion Weisler, President and CEO, HP Inc. "We are confident in our ability to manage our business and deliver our FY17 financial commitments."

Asset management
HP's cash provided by operating activities in the first quarter was $0.8 billion. Accounts receivable ended the quarter at $3.5 billion, down 5 days quarter over quarter to 25 days. Inventory ended the quarter at $4.6 billion, unchanged quarter over quarter at 39 days. Accounts payable ended the quarter at $11.0 billion, down 4 days quarter over quarter to 94 days. HP's dividend payment of $0.1327 per share in the first quarter resulted in cash usage of $0.2 billion. HP also utilized $0.4 billion of cash during the quarter to repurchase approximately 25.5 million shares of common stock in the open market. HP exited the quarter with $6.3 billion in gross cash, which includes cash and cash equivalents, short-term investments, and certain liquid long-term investments.

Fiscal 2017 first quarter segment results

  • Personal Systems net revenue was up 10% year over year (up 11% in constant currency) with a 3.8% operating margin. Commercial net revenue increased 7% and Consumer net revenue increased 15%. Total units were up 8% with Notebooks units up 12% and Desktops units flat.
  • Printing net revenue was down 3% year over year (down 2% in constant currency) with a 16.0% operating margin. Total hardware units were up 6% with Commercial hardware units up 2% and Consumer hardware units up 7%. Supplies net revenue was down 3% (down 2% in constant currency).

Outlook
For the fiscal 2017 second quarter, HP estimates GAAP diluted net EPS from continuing operations to be in the range of $0.32 to $0.35 and non-GAAP diluted net EPS to be in the range of $0.37 to $0.40. Fiscal 2017 second quarter non-GAAP diluted net EPS estimates exclude $0.05 per diluted share, primarily related to restructuring and other charges, acquisition-related charges, non-operating retirement-related credits / (charges), and net tax indemnifications.

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

HP's FY17 Q1 earnings conference call is accessible via an audio webcast
www.hp.com/investor/2017Q1Webcast .

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