HP(HPQ) - 2024 Q2 - Quarterly Results

Financial Performance - Second quarter net revenue was $12.8 billion, down 0.8$0.61, down from $1.06 in the prior-year period, within the outlook of$0.58 to $0.68 [5] - Non-GAAP diluted net EPS for the second quarter was$0.82, up from $0.79 in the prior-year period, within the outlook of$0.76 to $0.86 [5] - Total net revenue for the three months ended April 30, 2024, was$12,800 million, a decrease of 2.9% from $13,185 million in the previous quarter [20] - Net earnings for the three months ended April 30, 2024, were$607 million, down 2.4% from $622 million in the previous quarter [20] - Basic net earnings per share for the three months ended April 30, 2024, were$0.62, compared to $0.63 in the previous quarter [20] - Total net revenue for the six months ended April 30, 2024, was$25,985 million, a decrease of 2.7% from $26,705 million in the same period last year [22] - Net earnings for the six months ended April 30, 2024, were$1,229 million, down 19.3% from $1,523 million in the same period last year [22] - Non-GAAP net earnings for the three months ended April 30, 2024, were$812 million, reflecting an increase from $808 million in the previous quarter [24] - GAAP net earnings for the six months ended April 30, 2024, were$1,229 million, down from $1,523 million in the same period last year, representing a decrease of 19.3$1,620 million, an increase of 6.9% compared to $1,516 million in the prior year [26] Segment Performance - Personal Systems segment net revenue was$8.4 billion, up 3% year over year, with a 6.0% operating margin [8] - Printing segment net revenue was $4.4 billion, down 8$6,242 million, up 3% Q/Q and 6% Y/Y, while Consumer Personal Systems revenue decreased to $2,184 million, down 21$25,985 million, reflecting a 3% decrease Y/Y [34] - The total segment operating margin for the three months ended April 30, 2024, was 10.2%, a decrease of 0.2 percentage points Q/Q and an increase of 0.2 percentage points Y/Y [35] - Personal Systems segment operating margin improved to 6.0% for the three months ended April 30, 2024, compared to 5.3% in the same quarter last year [35] - Corporate Investments segment reported a net revenue of $5 million for the three months ended April 30, 2024, compared to$2 million in the previous quarter [32] Cash Flow and Shareholder Returns - Free cash flow for the second quarter was $0.5 billion, including net cash provided by operating activities of$0.6 billion [6] - HP returned $0.4 billion to shareholders through dividends and share repurchases in the second quarter [2] - HP anticipates generating free cash flow in the range of$3.1 to $3.6 billion for fiscal 2024 [10] - Cash, cash equivalents, and restricted cash decreased to$2,517 million as of April 30, 2024, from $3,232 million at the end of October 2023 [28] - Net cash provided by operating activities for the six months ended April 30, 2024, was$702 million, an increase from $620 million in the same period last year [30] - The company reported a net cash used in investing activities of$277 million for the six months ended April 30, 2024, compared to $441 million in the prior year [30] - The company repurchased$600 million of common stock during the six months ended April 30, 2024 [30] Future Outlook - For fiscal 2024, HP estimates GAAP diluted net EPS to be in the range of $2.60 to$2.90 and non-GAAP diluted net EPS to be in the range of $3.30 to$3.60 [10] - The company has unveiled an innovative portfolio of solutions designed for the AI and hybrid era, indicating a focus on future growth opportunities [5] - Key Growth Areas identified by HP include Hybrid Systems, Gaming, Workforce Solutions, Consumer Subscriptions, Industrial Graphics, and 3D & Personalization, expected to grow faster than core business [50] Non-GAAP Financial Measures - HP's management utilizes non-GAAP financial measures to evaluate historical and prospective financial performance, excluding restructuring and other charges to better understand ongoing operating results [43] - The company incurs costs related to acquisitions and divestitures, which are excluded from non-GAAP measures to facilitate a meaningful evaluation of current operating performance [44] - Amortization of intangible assets is excluded from non-GAAP measures, as it significantly impacts GAAP earnings and does not reflect current operating performance [45] - HP excludes debt extinguishment costs and benefits from non-GAAP calculations to provide a clearer view of current operating performance [46] - Non-operating retirement-related adjustments are excluded from non-GAAP measures, as they are considered outside the operational performance of the business [47] - Tax adjustments related to internal reorganizations and various regulatory changes are excluded from non-GAAP measures for a more accurate evaluation of operating performance [48] - Free cash flow is defined as cash flow from operations adjusted for net investments, providing insight into liquidity and capital resources [49] - HP acknowledges limitations of non-GAAP measures, emphasizing reliance on GAAP results and providing reconciliations for investor clarity [52] - The company believes that non-GAAP financial measures offer investors greater insight into financial and operational decision-making, enhancing understanding of operating performance [53]