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

According to news in the morning of May 31, Beijing time, Hewlett-Packard today released its financial results for the second quarter of fiscal 2023. According to the report, HP's second-quarter net revenue was $12.9 billion, down 21.7% from $16.5 billion in the same period last year, 18.0% year-on-year, excluding exchange rate changes, and net profit of $1.1 billion, up 7% from $1 billion in the same period last year. HP's adjusted net profit for the second quarter, which is not in accordance with US GAAP, was $800m, down 31 per cent from $1.2 billion in the same period last year.

HP's second-quarter adjusted earnings per share beat Wall Street analysts' expectations, but revenue failed to meet expectations. At the same time, HP's earnings outlook for the third quarter and the full year exceeded expectations. HP's shares fell nearly 5% in after-hours trading after the results were released.

Summary of results for the second quarter: for the quarter ended April 30, 2023, HP's net profit was $1.1 billion, up 7% from $1 billion in the same period last year, and diluted earnings per share were $1.07, up 14% from $0.94 in the same period last year.

Excluding one-time items (not in accordance with GAAP), HP's adjusted net income for the second quarter was $800m, down 31 per cent from $1.2 billion in the same period last year, and diluted earnings per share were $0.80. it was down 26% from $1.08 in the same period last year, but it still beat analysts' expectations. On average, 13 analysts had expected HP's second-quarter earnings per share to reach 76 cents, according to data provided by Yahoo Finance.

HP's second-quarter net income and earnings per share (which are not in accordance with GAAP) exclude after-tax adjustments of $269 million and $0.27 per share, respectively. This adjustment is related to restructuring and other expenses, merger and acquisition divestiture related expenses, intangible asset amortization, non-operating retirement related credit and tax adjustment.

HP's second-quarter net revenue was $12.9 billion, down 21.7% from $16.5 billion in the same period last year. Excluding currency changes, HP's second-quarter net revenue fell 18.0% from a year earlier, falling short of analysts' expectations. On average, 11 analysts had expected HP's second-quarter net revenue to reach $13.07 billion, according to Yahoo Finance.

HP's second-quarter operating profit was $762 million, compared with $1.278 billion a year earlier. Excluding some one-time items (not in accordance with GAAP), HP's adjusted operating profit for the second quarter was $1.121 billion, compared with $1.444 billion in the same period last year.

HP's operating margin in the second quarter was 5.9%, down 1.9 percentage points from 7.8% in the same period last year. Excluding some one-time items (not in accordance with GAAP), HP's adjusted operating profit margin was 8.7% in the second quarter, down 0.1 percentage points from 8.8% in the same period last year.

Performance of departments in the second quarter: by business unit, Hewlett-Packard personal Systems Group's second-quarter revenue was $8.176 billion, down 29% from $11.532 billion in the same period last year, and 25% year-on-year excluding exchange rate changes. Personal Systems Group second-quarter operating profit margin was 5.4%. Of this total, revenue from the business sector fell 24% from a year earlier, while revenue from the personal consumer sector fell 39% from a year earlier. In terms of shipments, shipments in the consumer sector fell 34 per cent year-on-year, while those in the commercial sector fell 23 per cent, and total shipments fell 28 per cent. HP's personal Systems Group posted a pre-tax profit of $445 million in the second quarter, compared with $794 million a year earlier.

Hewlett-Packard printing group's second-quarter revenue was $4.736 billion, down 5% from $4.963 billion in the same period last year, and 2% year-on-year excluding exchange rate changes; operating profit margin was 19.0%. Of this total, net revenue in the individual consumer sector fell 19 per cent year-on-year, while net revenue in the business sector increased by 5 per cent year-on-year; net revenue from materials fell 4 per cent year-on-year, excluding exchange rate changes. In terms of shipments, commercial hardware shipments were unchanged from the same period last year, personal hardware shipments were down 5% from the same period last year, and total hardware shipments were down 4%. Hewlett-Packard Printing made a pre-tax profit of $899 million in the second quarter, compared with $949 million a year earlier.

HP's second-quarter corporate investment was $3 million, compared with $1 million in the previous quarter and zero in the same period last year. HP posted a pre-tax loss of $38 million on corporate investments in the second quarter, compared with a pre-tax loss of $52 million in the same period last year.

HP's other revenue in the second quarter was-$2 million, compared with zero in the previous quarter and-$5 million in the same period last year.

Other financial information: HP's total costs and expenses in the second quarter were $12.151 billion, compared with $15.212 billion in the same period last year. Of this total, revenue costs were $9.984 billion, compared with $13.157 billion for the same period last year; R & D expenditure was $410 million, compared with $425 million for the same period last year; sales, general and administrative expenses were $1.398 billion, compared with $1.464 billion for the same period last year; restructuring and other expenses were $200 million, compared with $8200 for the same period last year. M & A-related expenses were $73 million, compared with $32 million in the same period last year, and amortization of intangible assets was $86 million, compared with $52 million in the same period last year.

HP's business operations provided $600 million in net cash in the second quarter, compared with $500 million in the same period last year. At the end of the second quarter, Hewlett-Packard had total receivables of $4.1 billion and 29 days of accounts receivable turnover, an increase of one day from the previous quarter.

At the end of the second quarter, HP had a total inventory value of $7.2 billion and 65 days of inventory, an increase of five days from the previous quarter. At the end of the second quarter, Hewlett-Packard had total accounts payable of $13.3 billion and accounts payable turnover days of 120 days, an increase of 10 days compared with the previous quarter.

HP's free cash flow in the second quarter was $500 million, compared with $400 million in the same period last year. HP's free cash flow in the second quarter included $600 million in net cash from business operations, adjusted for $35 million in net investment in leases and $130 million in net investment in property, plant and equipment.

Hewlett-Packard paid a quarterly dividend of $0.2625 per share in the second quarter, using $300m in cash to pay out the dividend. At the end of the second quarter, HP held a total of $1.9 billion in gross cash, including $1.9 billion in cash, cash equivalents and restricted cash, as well as $3 million in short-term investments in other liquid assets. Cash, cash equivalents and restricted cash include $17 million in restricted cash related to the amount collected and held for trade receivables previously sold on behalf of third parties.

Performance outlook: performance outlook for the third quarter of fiscal year 2023

Hewlett-Packard expects diluted earnings per share to range from 61 cents to 71 cents per share in fiscal 2023 under GAAP, but without GAAP, adjusted diluted earnings per share are expected to reach 81 cents to 91 cents in the third quarter, with an average of 86 cents above analysts' expectations. Not in accordance with GAAP, HP's estimate of diluted earnings per share from continuing operations for the third quarter of fiscal 2023 did not include after-tax expenses of $0.20 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 credits, tax adjustments and the tax impact of these items.

On average, 13 analysts expect HP's adjusted earnings per share to reach 85 cents a share in the third quarter, according to data provided by Yahoo Finance.

Full-year performance outlook for fiscal year 2023

HP also expects diluted earnings per share to be between $2.91 and $3.11 per share in fiscal 2023 under GAAP; without GAAP, diluted earnings per share are expected to be between $3.30 and $3.50 in fiscal 2023, with an average of $3.40 exceeding analysts' expectations. Not in accordance with GAAP, HP's estimates of diluted earnings per share from continuing operations for fiscal year 2023 and 2023 did not include after-tax expenses of $0.39 per share, which are mainly related to restructuring and other expenses, mergers and acquisitions and divestitures, amortization of intangible assets, debt liquidation expenses, non-operating retirement-related credit or expenses, tax adjustments and the related tax impact of these items.

On average, 16 analysts expect HP's adjusted earnings per share to reach $3.34 in fiscal 2023, according to Yahoo Finance.

Share price movements: HP shares fell 37 cents, or 1.18 percent, to close at $30.93 in regular trading on the New York Stock Exchange. HP shares fell another $1.43, or 4.62 per cent, to $29.50 in after-hours trading as of 05:45 est (05:45 Beijing time, May 31). In the past 52 weeks, HP's highest price is $40.79 and its lowest price is $24.08.

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