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

According to the news in the morning of March 1, Beijing time, Hewlett-Packard today released its results for the first quarter of fiscal year 2023. According to the report, Hewlett-Packard's first-quarter net revenue was $13.8 billion (currently about 95.91 billion yuan), down 18.8% from $17 billion in the same period last year, and 14.7% year-on-year excluding exchange rate changes. Net profit was $500 million (currently about 3.475 billion yuan), down 55% from $1.1 billion a year earlier Excluding one-time items (not in accordance with US GAAP), HP's adjusted net profit for the first quarter was $700m, down 38 per cent from $1.2 billion a year earlier.

HP's first-quarter revenue fell short of Wall Street analysts' expectations, but adjusted diluted earnings per share exceeded expectations. Meanwhile, HP's earnings outlook for the second quarter and full year of fiscal 2023 beat analysts' expectations, pushing its shares up more than 2 per cent in after-hours trading.

Summary of fiscal first quarter results: for the quarter ended January 31, 2023, HP's net profit was $500 million, down 55% from $1.1 billion a year earlier, and diluted earnings per share were 49 cents per share, down 51 percent from 99 cents a year earlier.

Excluding one-time items (not in accordance with GAAP), hp's adjusted net income for the first quarter was $700 million, down 38% from $1.2 billion a year earlier, and adjusted diluted earnings per share was 75%. Down 32% from $1.10 a year earlier, but the performance still slightly exceeded analysts' expectations. Analysts had on average expected HP to earn 74 cents a share in the first quarter, according to Refinitiv, a provider of financial market data and infrastructure.

HP's first-quarter net income and earnings per share (which are not in accordance with GAAP) exclude after-tax adjustments of $262 million and $0.26 per share, respectively. This adjustment is related to restructuring and other expenses, mergers and acquisitions and divestiture-related expenses, intangible assets amortization, debt liquidation expenses, non-operating retirement-related credit or expenses, and tax adjustments.

HP's fiscal first quarter was $13.8 billion, down 18.8% from $17 billion a year earlier. Excluding currency changes, HP's first-quarter net revenue fell 14.7% from a year earlier, falling short of analysts' expectations. Analysts had on average expected HP's first-quarter net revenue to reach $14.12 billion, according to Refinitiv.

HP's first-quarter operating profit was $765 million, compared with $1.359 billion a year earlier. Excluding one-time items (not in accordance with GAAP), HP's adjusted operating profit for the first quarter was $1.075 billion, compared with $1.499 billion a year earlier.

HP's operating margin in the first quarter was 5.5%, down 2.5 percentage points from 8.0% a year earlier. Excluding one-time items (not in accordance with GAAP), HP's adjusted operating profit margin for the first quarter was 7.8%, down 1.0 percentage points from 8.8% a year earlier.

Performance of departments in the first quarter: by business unit, Hewlett-Packard personal Systems Group's first-quarter revenue was $9.215 billion, down 24% from $12.196 billion in the same period last year, and 20% year-on-year excluding exchange rate changes. Personal Systems Group's first-quarter operating profit margin was 5.4%. HP's personal Systems Group posted a pre-tax profit of $497 million in the first quarter, compared with $954 million a year earlier.

-within the personal systems group: (1) net revenue of the commercial PS division was $6.429 billion, down 18% from $7.857 billion in the same period last year; (2) net revenue of the consumer PS division was $2.786 billion, down 36% from $4.339 billion in the same period last year.

-in terms of shipments, the shipments of the PS department of individual consumers decreased by 33% compared with the same period last year, the shipments of the commercial PS department decreased by 24%, and the total shipments decreased by 28%.

Hewlett-Packard printing group's first-quarter revenue was $4.612 billion, down 5% from $4.831 billion a year earlier, down 2% year-on-year, excluding exchange rate changes, and an operating profit margin of 18.9%. Hewlett-Packard Printing made a pre-tax profit of $870 million in the first quarter, compared with $872 million a year earlier.

-within the printing group: (1) net revenue of the commercial printing division was $1.056 billion, up 2% from $1.039 billion in the same period last year; and (2) net revenue of the consumer printing division was $699 million, down 3% from $724 million in the same period last year. (3) net revenue from materials was $2.857 billion, down 7 per cent from $3.068 billion in the same period last year.

-in terms of shipments, shipments of commercial printing departments decreased by 8% year-on-year, individual consumer printing hardware revenue increased by 3% year-on-year, and total hardware shipments increased by 2%.

HP's first-quarter corporate investment was $1 million, compared with $1 million in the same period last year and the previous quarter. HP posted a pre-tax loss of $33 million on corporate investments in the first quarter, compared with $74 million in the same period a year earlier and $46 million in the previous quarter.

Other financial information: Hewlett-Packard's total costs and expenses were $13.063 billion in the first quarter, compared with $15.669 billion a year earlier. Of this total, revenue cost was $11.019 billion, compared with $13.443 billion in the same period last year; R & D expenditure was $403 million, compared with $418 million in the same period last year; sales, general and administrative expenses were $1.331 billion, compared with $1,468 million in the same period last year; restructuring and other expenses were $141m, compared with $6800 in the same period last year; M & A-related expenses were $8400, compared with $2000 in the same period last year. Amortization expenses for intangible assets were $85 million, compared with $52 million in the same period last year.

Net cash provided by HP's business operations in the first quarter was-$16 million, compared with $1.7 billion in the same period last year. At the end of the first quarter, Hewlett-Packard had total receivables of $4.3 billion and accounts receivable turnover days of 28 days, unchanged from the previous quarter. At the end of the first quarter, HP had a total inventory value of $7.3 billion and 60 days of inventory, an increase of three days from the previous quarter. At the end of the first quarter, Hewlett-Packard had total accounts payable of $13.5 billion and accounts payable turnover days of 110 days, a decrease of four days compared with the previous quarter.

HP's free cash flow was-$200 million in the first quarter, compared with $1.4 billion a year earlier. HP's fiscal first quarter free cash flow included net cash provided by business operations-$16 million, but adjusted for: (1) $16 million net lease investment; (2) $192 million net investment in real estate, plant and equipment.

Hewlett-Packard paid a quarterly dividend of $0.2625 per share in the first quarter and used $300m of cash to pay out the dividend. In addition, HP used $100 million in cash to buy back about 3.6 million common shares on the open market in the first quarter. At the end of the first quarter, HP held a total of $1.8 billion in gross cash, including cash and cash equivalents as well as restricted cash, and held $18 million in short-term investments.

Performance outlook: second quarter results outlook Hewlett-Packard expects diluted earnings per share to be between 40 cents and 50 cents per share in accordance with GAAP in fiscal 2023. Diluted earnings per share are expected to be between 73 cents and 83 cents in the second quarter, with an average of 78 cents above analysts' expectations. Not in accordance with GAAP, HP's estimate of diluted earnings per share from continuing operations for the second quarter of fiscal 2023 did not include after-tax expenses of $0.33 per share. This expenditure is mainly related to restructuring and other expenses, mergers and acquisitions and divestiture-related expenses, amortization of intangible assets, non-operating retirement-related credit or expenses, tax adjustments and the related tax impact of these items.

Analysts on average expect HP's adjusted earnings per share to reach 76 cents a share in the second quarter, according to Refinitiv, a provider of financial market data and infrastructure.

For the entire fiscal year 2023, HP expects diluted earnings per share to be between $2.22 and $2.62 per share; excluding GAAP, diluted earnings per second quarter are expected to be between $3.20 and $3.60, with an average of $3.40 exceeding analysts' expectations. Not in accordance with GAAP, HP's estimate of diluted earnings per share from continuing operations for the second quarter of 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-related expenses, intangible asset amortization, debt liquidation expenses, non-operating retirement-related credit or expenses, tax adjustments and the tax impact of these items.

Analysts on average expect HP's adjusted earnings per share to reach $3.29 in fiscal 2023, according to Refinitiv.

In addition, HP expects free cash flow of between $3 billion and $3.5 billion in fiscal 2023.

Share price movements: HP shares rose 13 cents, or 0.44%, to close at $29.52 in regular trading on the New York Stock Exchange. HP shares rose 69 cents, or 2.34 percent, to $30.21 in after-hours trading as of 04:52 est (05:52 Beijing time, March 1). In the past 52 weeks, HP's highest price is $41.47 and its lowest price is $24.08.

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