Shulou(Shulou.com)11/24 Report--

In the early morning of August 31, Beijing time, Hewlett-Packard today released the company's financial results for the third quarter of fiscal 2022.

According to the report, HP's third-quarter net revenue was $14.7 billion, down 4.1% from $15.3 billion in the same period last year, down 1.9% year-on-year, excluding exchange rate changes, and net profit was $1.1 billion, up 1% from $1.1 billion in the same period last year. Adjusted net profit, which is not in accordance with US general accounting standards, was $1.1 billion, down 10 per cent from $1.2 billion in the same period last year.

HP's adjusted earnings per share in the third quarter met analysts' expectations, but revenue failed to meet expectations, and the company's outlook for fourth-quarter and full-year earnings fell below Wall Street analysts' expectations, causing its shares to fall nearly 4% in after-hours trading.

Summary of results for the third quarter:

For the quarter ended July 31, hp's net profit was $1.1 billion, up 1% from $1.1 billion a year earlier, and diluted earnings per share were $1.08, up 17% from $0.92 a year earlier.

Excluding one-time items (not in accordance with GAAP), HP's adjusted third-quarter net profit was $1.1 billion, down 10% from $1.2 billion in the same period last year, and adjusted diluted earnings per share was $1.04. up 4% from $1.00 in the same period last year, which was in line with analysts' expectations. On average, 13 analysts expect HP to earn $1.04 a share in the third quarter, according to data provided by Yahoo Finance.

HP's third quarter net income and earnings per share (not in accordance with GAAP) exclude after-tax adjustments of $40 million and $0.04 per share, respectively. This adjustment is related to restructuring and other expenses, M & A-related expenses, intangible assets amortization expenses, exit fees from the Russian market, non-operating retirement-related credit or expenses, and tax adjustments.

HP's third-quarter net revenue was $14.7 billion, down 4.1% from $15.3 billion in the same period last year. Excluding currency changes, HP's third-quarter net revenue fell 1.9% from a year earlier, which fell short of analysts' expectations. On average, 11 analysts expect HP's third-quarter net revenue to reach $15.74 billion, according to data provided by Yahoo Finance.

HP's operating margin in the third quarter was 8.7%, down 0.3 percentage points from 9.0% in the same period last year. Excluding one-time items (not in accordance with GAAP), HP's adjusted operating margin in the third quarter was 9.5%, down 0.3 percentage points from 9.8% in the same period last year.

Results of various departments in the third quarter:

By business unit, HP's third-quarter revenue was $10.089 billion, down 3 per cent from $10.406 billion in the same period last year, and the impact of exchange rate changes was flat; the operating margin of the personal systems group was 6.9 per cent in the third quarter. Of this total, net revenue in the business sector rose 7 per cent year-on-year, while net revenue in the personal consumer sector fell 20 per cent. Judging from the shipping data, desktop shipments increased by 1% in the third quarter compared with the same period last year, notebook shipments fell by 32%, and total shipments fell by 25%.

Hewlett-Packard printing group's third-quarter revenue was $4.575 billion, down 6% from $4.882 billion in the same period last year, down 5% year-on-year, excluding exchange rate changes, and an operating profit margin of 19.9%. Of this total, net revenue in the consumer sector rose 1 per cent year-on-year, while net revenue in the business sector fell 3 per cent year-on-year. According to the data of shipments, commercial hardware shipments fell 15% in the third quarter compared with the same period last year, personal hardware shipments dropped 1%, and total hardware shipments fell 3%.

HP's corporate investment was zero in the third quarter, compared with zero in the same period last year; pre-tax losses from corporate investments were $58 million, compared with $20 million in the same period last year.

Hewlett-Packard's third-quarter net material revenue fell 9% from a year earlier, excluding currency changes.

Other financial information for the third quarter:

HP's total costs and expenses in the third quarter were $13.392 billion, compared with $13.908 billion in the same period last year. Of this total, revenue costs were $11.764 billion, compared with $11.901 billion for the same period last year; R & D expenditure was $368 million, compared with $477 million for the same period last year; sales, general and administrative expenses were $1.143 billion, compared with $1.408 billion for the same period last year; restructuring and other expenses were $1300, compared with $5600 for the same period last year. M & A related expenses were $31 million, compared with $24 million for the same period last year; amortization expenses for intangible assets were $50 million, compared with $42 million for the same period last year; and expenses related to withdrawing from the Russian market were $23 million, compared with no such charges for the same period last year.

Hewlett-Packard's third-quarter business operations provided net cash of $400 million. At the end of the third quarter, Hewlett-Packard had total receivables of $4.4 billion and accounts receivable turnover days of 27 days, down two days from the previous quarter.

At the end of the third quarter, HP had a total inventory value of $8.2 billion and 63 days of inventory, an increase of two days from the previous quarter.

At the end of the third quarter, Hewlett-Packard had total accounts payable of $15.5 billion and accounts payable turnover days of 119 days, an increase of three days from the previous quarter.

HP's free cash flow in the third quarter was $300 million, including $400 million in net cash from business operations, adjusted for a net investment of $53 million in leases and $170 million in property, plant and equipment.

Hewlett-Packard paid a quarterly dividend of $0.25 per share in the third quarter, using $300 million in cash for the dividend. In addition, Hewlett-Packard used $1 billion in cash to buy back about 29.3 million common shares on the open market in the third quarter. As a result, hp returned 464% of its free cash flow to shareholders in the third quarter.

At the end of the third quarter, HP's gross cash holdings totaled $5.4 billion, including $5 million in cash and cash equivalents contained in other liquid assets, as well as short-term investments.

Performance outlook:

Outlook for fourth quarter results:

Hewlett-Packard expects diluted earnings per share to range from 44 cents to 54 cents per share in accordance with GAAP in fiscal 2022. Without GAAP, adjusted diluted earnings per share for the fourth quarter are expected to reach 79 cents to 89 cents, with an average of 84 cents, which falls short of analysts' expectations. Hewlett-Packard did not include after-tax expenses of $0.35 per share in its estimates of diluted earnings per share from continuing operations in the fourth quarter of fiscal 2022, not in accordance with GAAP. This expenditure is mainly related to restructuring and other expenses, M & A related expenses (including those related to the acquisition of audio and video products manufacturer Poly), intangible assets amortization expenses, non-operational retirement-related credit or expenses, tax adjustments and the related tax impact of these projects.

On average, 13 analysts expect HP to earn $1.06 a share in the fourth quarter, according to data provided by Yahoo Finance.

Full-year performance outlook:

Hewlett-Packard expects diluted earnings per share for fiscal year 2022 to be between $3.46 and $3.56 under GAAP; without GAAP, adjusted diluted earnings per share for fiscal 2022 are expected to be between $4.02 and $4.12, with an average of $4.07, a performance outlook that falls short of analysts' expectations. Hewlett-Packard did not take into account after-tax expenses of $0.56 per share in its estimate of diluted earnings per share from continuing operations for the full fiscal year 2022, not in accordance with US GAAP. This expenditure is mainly related to restructuring and other expenses, M & A related expenses (including those related to the acquisition of audio and video products manufacturer Poly), expenses related to withdrawing from the Russian market, intangible assets amortization expenses, non-operational retirement-related credit or expenses, debt service costs, tax adjustments and the related tax impact of these projects.

On average, 15 analysts expect HP to earn $4.30 a share in fiscal 2022, according to data provided by Yahoo Finance.

Changes in stock prices:

On the day, HP shares fell 43 cents, or 1.36 percent, to $31.10 in regular trading on the New York Stock Exchange. HP shares fell another $1.21, or 3.89 per cent, to $29.89 in after-hours trading as of 05:19 est on Tuesday (05:19 Beijing time on Wednesday). In the past 52 weeks, HP's highest price is $41.47 and its lowest price is $26.11.

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