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

According to news in the morning of November 23, Beijing time, Hewlett-Packard today released its fourth quarter and full-year results for fiscal 2022. According to the report, HP's fourth-quarter net income was $14.801 billion, down 11.2% from $16.675 billion in the same period last year, and a net loss of $2 million, compared with a net profit of $3.099 billion in the same period last year. Adjusted net profit, which is not in accordance with US general accounting standards, was $900 million, down 21% from $1.1 billion in the same period last year.

HP's fourth-quarter revenue and adjusted earnings per share both beat Wall Street analysts' expectations, but failed to meet expectations for adjusted earnings per share for the first quarter and full year of fiscal 2023. HP shares rose nearly 1% in after-hours trading after the earnings announcement.

Meanwhile, Hewlett-Packard announced that it plans to lay off 4000 to 6000 employees over the next three years. As of October 2021, HP had about 51000 employees. In 2019, HP announced that it would lay off 7000 to 9000 employees.

Summary of fourth quarter results: HP posted a net loss of $2 million for the quarter ended October 31, 2022, compared with a net profit of $3.099 billion in the same period last year. HP posted a diluted loss of $0 per share in the fourth quarter, compared with diluted earnings of $2.71 a share in the same period last year.

Excluding one-time items (not in accordance with GAAP), HP's adjusted net income for the fourth quarter was $900 million, down 21% from $1.1 billion in the same period last year, and adjusted earnings per share was 85%. Down 10% from 94 dollars in the same period last year, but the performance still slightly exceeded analysts' expectations. Analysts had on average expected HP to earn 84 cents a share in the fourth quarter, according to FactSet, a financial information provider.

HP's fourth-quarter net income and earnings per share (which are not in accordance with GAAP) exclude after-tax adjustments of $857 million and $0.85 per share, respectively. This adjustment is related to restructuring and other expenses, mergers and acquisitions and divestiture expenses, intangible assets amortization expenses, expenses related to withdrawal from the Russian market, non-operating retirement related expenses or credit, and tax adjustments.

HP's fourth-quarter net revenue was $14.801 billion, down 11.2% from $16.675 billion in the same period last year. Excluding currency changes, HP's fourth-quarter net revenue fell 8.0% from a year earlier, but it still beat analysts' expectations. Analysts had on average expected HP's fourth-quarter net revenue to reach $14.69 billion, according to FactSet.

According to general accounting standards, hp's fourth-quarter operating profit margin was 5.2%, down 2.2 percentage points from 7.4% in the same period last year. Excluding one-time items (not in accordance with GAAP), hp's adjusted operating margin was 7.7% in the fourth quarter, down 0.4 percentage points from 8.1% in the same period last year.

Fourth quarter results by departments: by business unit, HP personal Systems Group's fourth-quarter revenue was $10.267 billion, down 13% from $11.795 billion in the same period last year, and 9% year-on-year excluding exchange rate changes. Personal Systems Group's fourth-quarter operating profit margin was 4.5%. Of this total, the net revenue of the commercial sector fell 6% year-on-year, and that of the individual consumer sector dropped 25% year-on-year; total shipments fell 21% year-on-year, including notebook shipments down 3% and desktop shipments down 26%.

Within the personal systems group, HP's net revenue from notebooks in the fourth quarter was $6.454 billion, down 23% from $8.339 billion in the same period last year, while net revenue from desktops was $2.537 billion, up 1% from $2.51 billion in the same period last year. Net revenue from workstations was $535 million, up 9 per cent from $492 million in the same period last year, while net revenue from other products was $741 million, up 63 per cent from $454 million in the same period last year.

Hewlett-Packard printing group's fourth-quarter revenue was $4.533 billion, down 7% from $4.879 billion in the same period last year, and 6% year-on-year excluding exchange rate changes; operating profit margin was 19.9%. In the fourth quarter, total hardware shipments fell 3% from a year earlier, including commercial hardware shipments up 5% year-on-year and personal hardware shipments down 4%. Net revenue from the personal hardware business fell 7 per cent year-on-year, while commercial hardware revenue rose 1 per cent from a year earlier.

Within the printing group, HP's revenue from commercial products in the fourth quarter was $1.108 billion, up 1 per cent from $1.097 billion in the same period last year, while revenue from consumer products was $677 million, down 7 per cent from $725 million in the same period last year.

HP's fourth-quarter corporate investment was $1 million, compared with $2 million in the same period last year.

HP's fourth-quarter materials revenue was $2.748 billion, down 10 per cent from $3.057 billion in the same period last year, and also down 10 per cent from a year earlier, excluding currency changes.

Full-year results: for the entire fiscal year 2022, hp's net revenue was $63 billion, down 0.8% from $63.5 billion in fiscal 2021, and grew 0.7% year-on-year, excluding currency changes. HP's net profit for fiscal 2022 was $3.2 billion, down 51 per cent from $6.5 billion in fiscal 2021. HP's diluted earnings per share in fiscal 2022 was $3.05, down 43% from $5.33 in fiscal 2021.

Excluding one-time items (not in accordance with GAAP), HP's adjusted net profit for fiscal 2022 was $4.3 billion, down 7% from $4.6 billion in fiscal 2021, and adjusted earnings per share were $4.08. up 8% from $3.79 in the same period last year, exceeding analysts' expectations. Analysts had on average expected HP's adjusted earnings per share for fiscal 2022 to be $4.07, according to FactSet.

HP's operating margin was 7.4% in fiscal 2022, down 1.0 percentage points from 8.4% in fiscal 2021. Excluding one-time items (not in accordance with GAAP), HP's adjusted operating profit margin for fiscal 2022 was 8.7%, down 0.4 percentage points from 9.1% in fiscal 2021.

Other financial information: HP's total costs and expenses in the fourth quarter were $14.034 billion, compared with $15.437 billion in the same period last year. Of this total, revenue costs were $12.084 billion, compared with $13.41 billion for the same period last year; R & D expenditure was $382 million, compared with $445 million for the same period last year; sales, general and administrative expenses were $1.189 billion, compared with $1,474 million for the same period last year; restructuring and divestiture expenses were $7000, compared with $2900 for the same period last year. M & A-related expenses were $235 million, compared with $28 million in the same period last year, and amortization of intangible assets was $74 million, compared with $51 million in the same period last year.

Hewlett-Packard's fourth-quarter business operations provided net cash of $1.9 billion. At the end of the fourth quarter, Hewlett-Packard had total receivables of $4.5 billion and accounts receivable turnover days were 28 days, an increase of one day from the previous quarter. At the end of the fourth quarter, HP had a total inventory value of $7.6 billion and 57 days of inventory, down six days from the previous quarter. At the end of the fourth quarter, Hewlett-Packard had total accounts payable of $15.3 billion and accounts payable turnover days of 114 days, a decrease of five days compared with the previous quarter.

HP's free cash flow in the fourth quarter was $1.8 billion. Free cash flow includes $1.9 billion in net cash provided by business operations and adjusted for $61 million in net investment in leases and $144 million in net investment in property, plant and equipment.

Hewlett-Packard paid a cash dividend of $0.25 per share in the fourth quarter, using $200 million in cash to pay out the dividend. In addition, HP used $800 million in cash to buy back about 26.6 million common shares on the open market in the fourth quarter. As a result, hp returned 55% of its free cash flow to shareholders in the fourth quarter. At the end of the fourth quarter, HP held a total of $3.2 billion in cash, including cash and cash equivalents and short-term investments.

Hewlett-Packard provided net cash of $4.5 billion and free cash flow of $3.9 billion from business operations for fiscal 2022. Free cash flow includes $4.5 billion in net cash provided by business operations and adjusted for $155 million in net investment in leases and $765 million in net investment in property, plant and equipment.

Hewlett-Packard used about $4.3 billion in cash to buy back about 126 million common shares on the open market throughout fiscal 2022. With hp's $1 billion cash dividend in fiscal 2022, the company returned 138 per cent of its free cash flow to shareholders for the year.

Performance outlook: Hewlett-Packard expects diluted earnings per share to be between 47 and 57 per share in accordance with US GAAP in accordance with US GAAP in the first quarter of fiscal 2023; without GAAP, adjusted diluted earnings per share are expected to reach between 70 and 80 per share in the first quarter of 2023, which fails to meet analysts' expectations. Not in accordance with GAAP, HP's estimates of diluted earnings per share from continuing operations for the first quarter of fiscal 2023 do not include after-tax expenses of $0.23 per share, which are mainly related to restructuring and other expenses, mergers and acquisitions and divestitures, intangible asset amortization expenses, non-operating retirement related expenses or credits, tax adjustments and the related tax impact of these items.

Analysts had on average expected HP's adjusted earnings per share of 86 cents a share in the first quarter, according to data provided by FactSet.

Outlook for fiscal year 2023: Hewlett-Packard expects diluted earnings per share for the 2023 fiscal quarter to be between $2.22 and $2.62 per share; without GAAP, adjusted diluted earnings per share for fiscal year 2023 are expected to be between $3.20 and $3.60, and the average outlook ($3.40) falls short of analysts' expectations. Not in accordance with GAAP, HP's estimate of diluted earnings per share from continuing operations for fiscal 2023 did not include after-tax expenses of $0.98 per share. This expenditure is mainly related to restructuring and other expenses, mergers and acquisitions and divestiture expenses, intangible asset amortization expenses, non-operating retirement related expenses or credit, tax adjustments and the related tax impact of these items.

Analysts had on average expected HP's adjusted earnings per share of $3.54 in fiscal 2023, according to data provided by FactSet.

Hewlett-Packard also expects free cash flow in fiscal 2023 to range from $3 billion to $3.5 billion.

Share price movements: HP shares rose 22 cents, or 0.75%, to close at $29.38 in regular trading on the New York Stock Exchange. HP shares rose 0.25 per cent, or 0.85 per cent, to $29.63 in after-hours trading as of 04:46 EDT on the 22nd (05:46 Beijing time on the 23rd). In the past 52 weeks, HP's highest price is $41.47 and its lowest price is $24.08.

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