PALO ALTO, Calif., May 29, 2024 (GLOBE NEWSWIRE) -- HP (NYSE:HPQ) Second quarter GAAP diluted net earnings per share ("EPS") of $0.61, within the previously provided outlook of $0.58 to $0.68 per share Second quarter non-GAAP diluted net EPS of $0.82, within the previously provided outlook of $0.76 to $0.86 per share Second quarter net revenue of $12.8 billion, down 0.8% from the prior-year period Second quarter net cash provided by operating activities of $0.6 billion, free cash flow of $0.5 billion Second quarter returned $0.4 billion to shareholders in the form of dividends and share repurchases   HP Inc.'s fiscal 2024 second quarter financial performance   Q2 FY24 Q2 FY23 Y/Y GAAP net revenue ($B) $ 12.8   $ 12.9   (0.8)% GAAP operating margin   7.4%     5.8%   1.6 pts GAAP net earnings ($B) $ 0.6   $ 1.1   (42)% GAAP diluted net EPS $ 0.61   $ 1.06   (42)% Non-GAAP operating margin   8.8%     8.6%   0.2 pts Non-GAAP net earnings ($B) $ 0.8   $ 0.8   3% Non-GAAP diluted net EPS $ 0.82   $ 0.79   4% Net cash provided by operating activities ($B) $ 0.6   $ 0.6   (9)% Free cash flow ($B) $ 0.5   $ 0.5   (11)%                 Notes to tableInformation about HP Inc.'s use of non-GAAP financial information is provided under "Use of non-GAAP financial information" below. Net revenue and EPS resultsHP Inc. and its subsidiaries ("HP") announced fiscal 2024 second quarter net revenue of $12.8 billion, down 0.8% (down 1.2% in constant currency) from the prior-year period. "We delivered a solid quarter and first half, and unveiled an innovative portfolio of solutions designed for the AI and hybrid era," said Enrique Lores, President and CEO, HP Inc. "We have a clear strategy and are well positioned to drive profitable growth across our business." Second quarter GAAP diluted net EPS was $0.61, down from $1.06 in the prior-year period and within the previously provided outlook of $0.58 to $0.68. Second quarter non-GAAP diluted net EPS was $0.82, up from $0.79 in the prior-year period and within the previously provided outlook of $0.76 to $0.86. Second quarter non-GAAP net earnings and non-GAAP diluted net EPS excludes after-tax adjustments of $205 million, or $0.21 per diluted share, related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits and tax adjustments. Asset managementHP's net cash provided by operating activities in the second quarter of fiscal 2024 was $581 million. Accounts receivable ended the quarter at $4.3 billion, up 5 days quarter over quarter to 31 days. Inventory ended the quarter at $7.5 billion, up 9 days quarter over quarter to 70 days. Accounts payable ended the quarter at $14.4 billion, up 16 days quarter over quarter to 132 days. HP generated $481 million of free cash flow in the second quarter. Free cash flow includes net cash provided by operating activities of $581 million adjusted for net investments in leases of $19 million and net investments in property, plant and equipment of $119 million. HP's dividend payment of $0.2756 per share in the second quarter resulted in cash usage of $0.3 billion. HP also utilized $0.1 billion of cash during the quarter to repurchase approximately 3.5 million shares of common stock in the open market. HP exited the quarter with $2.5 billion in gross cash, which includes cash and cash equivalents of $2.4 billion, restricted cash of $75 million, and short-term investments of $3 million included in other current assets. Restricted cash relates to amounts collected and held on behalf of a third party for trade receivables previously sold. Fiscal 2024 Second quarter segment results Personal Systems net revenue was $8.4 billion, up 3% year over year (up 2% in constant currency) with a 6.0% operating margin. Consumer PS net revenue was down 3% and Commercial PS net revenue was up 6%. Total units were up 7% with Consumer PS units down 1% and Commercial PS units up 12%. Printing net revenue was $4.4 billion, down 8% year over year (down 7% in constant currency) with a 19.0% operating margin. Consumer Printing net revenue was down 16% and Commercial Printing net revenue was down 12%. Supplies net revenue was down 5% (down 4% in constant currency). Total hardware units were down 17%, with Consumer Printing units down 17% and Commercial Printing units down 17%. OutlookFor the fiscal 2024 third quarter, HP estimates GAAP diluted net EPS to be in the range of $0.63 to $0.77 and non-GAAP diluted net EPS to be in the range of $0.78 to $0.92. Fiscal 2024 second quarter non-GAAP diluted net EPS estimates exclude $0.15 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments and the related tax impact on these items. 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. Fiscal 2024 non-GAAP diluted net EPS estimates exclude $0.70 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments and the related tax impact on these items. For fiscal 2024, HP anticipates generating free cash flow in the range of $3.1 to $3.6 billion. More information on HP's earnings, including additional financial analysis and an earnings overview presentation, is available on HP's Investor Relations website at investor.hp.com. HP's FY24 Q2 earnings conference call is accessible via audio webcast at www.hp.com/investor/2024Q2Webcast. About HP Inc.HP Inc. (NYSE:HPQ) is a global technology leader and creator of solutions that enable people to bring their ideas to life and connect to the things that matter most. Operating in more than 170 countries, HP delivers a wide range of innovative and sustainable devices, services and subscriptions for personal computing, printing, 3D printing, hybrid work, gaming, and more. For more information, please visit http://www.hp.com. Use of non-GAAP financial informationTo supplement HP's consolidated condensed financial statements presented on a generally accepted accounting principles ("GAAP") basis, HP provides net revenue on a constant currency basis, non-GAAP total operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings, non-GAAP diluted net EPS, free cash flow, gross cash and net cash (debt) financial measures. HP also provides forecasts of non-GAAP diluted net EPS and free cash flow. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below or elsewhere in the materials accompanying this news release. In addition, an explanation of the ways in which HP's management uses these non-GAAP measures to evaluate its business, the substance behind HP's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP's management compensates for those limitations, and the substantive reasons why HP's management believes that these non-GAAP measures provide useful information to investors is included under "Use of non-GAAP financial measures" after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for net revenue, operating expense, operating profit, operating margin, other income and expenses, tax rate, net earnings, diluted net EPS, cash provided by operating activities or cash, cash equivalents, and restricted cash prepared in accordance with GAAP. Forward-looking statementsThis document contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, they could affect the business and results of operations of HP Inc. and its consolidated subsidiaries which may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, any statements regarding the impact of the COVID-19 pandemic; projections of net revenue, margins, expenses, effective tax rates, net earnings, net earnings per share, cash flows, benefit plan funding, deferred taxes, share repurchases, foreign currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring and other charges, planned structural cost reductions and productivity initiatives; any statements of the plans, strategies and objectives of management for future operations, including, but not limited to, our business model and transformation, our sustainability goals, our go-to-market strategy, the execution of restructuring plans and any resulting cost savings (including the fiscal 2023 plan), net revenue or profitability improvements or other financial impacts; any statements concerning the expected development, demand, performance, market share or competitive performance relating to products or services; any statements concerning potential supply constraints, component shortages, manufacturing disruptions or logistics challenges; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims, disputes or other litigation matters; any statements of expectation or belief as to the timing and expected benefits of acquisitions and other business combination and investment transactions (including the acquisition of Plantronics, Inc. ("Poly")); and any statements of assumptions underlying any of the foregoing. Forward-looking statements can also generally be identified by words such as "future," "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will," "would," "could," "can," "may," and similar terms. Risks, uncertainties and assumptions that could affect our business and results of operations include factors relating to the impact of macroeconomic and geopolitical trends, changes and events, including the Russian invasion of Ukraine, tension across the Taiwan Strait, the Israel-Hamas conflict, other hostilities in the Middle East and the regional and global ramifications of these events; volatility in global capital markets and foreign currency, increases in benchmark interest rates, the effects of inflation and instability of financial institutions; risks associated with HP's international operations; the effects of global pandemics, such as COVID-19, or other public health crises; the execution and performance of contracts by HP and its suppliers, customers, clients and partners, including logistical challenges with respect to such execution and performance; changes in estimates and assumptions HP makes in connection with the preparation of its financial statements; the need to manage (and reliance on) third-party suppliers, including with respect to supply constraints and component shortages, and the need to manage HP's global, multi-tier distribution network and potential misuse of pricing programs by HP's channel partners, adapt to new or changing marketplaces and effectively deliver HP's services; HP's ability to execute on its strategic plans, including the previously announced initiatives, business model changes and transformation; execution of planned structural cost reductions and productivity initiatives; HP's ability to complete any contemplated share repurchases, other capital return programs or other strategic transactions; the competitive pressures faced by HP's businesses; successfully innovating, developing and executing HP's go-to-market strategy, including online, omnichannel and contractual sales, in an evolving distribution, reseller and customer landscape; the development and transition of new products and services and the enhancement of existing products and services to meet evolving customer needs and respond to emerging technological trends, including artificial intelligence; successfully competing and maintaining the value proposition of HP's products, including supplies and services; challenges to HP's ability to accurately forecast inventories, demand and pricing, which may be due to HP's multi-tiered channel, sales of HP's products to unauthorized resellers or unauthorized resale of HP's products or our uneven sales cycle; integration and other risks associated with business combination and investment transactions; the results of our restructuring plans (including the fiscal 2023 plan), including estimates and assumptions related to the cost (including any possible disruption of HP's business) and the anticipated benefits of our restructuring plans; the protection of HP's intellectual property assets, including intellectual property licensed from third parties; the hiring and retention of key employees; disruptions in operations from system security risks, data protection breaches, cyberattacks, extreme weather conditions or other effects of climate change, and other natural or manmade disasters or catastrophic events; the impact of changes to federal, state, local and foreign laws and regulations, including environmental regulations and tax laws; our aspirations related to environmental, social and governance matters; potential impacts, liabilities and costs from pending or potential investigations, claims and disputes; our use of artificial intelligence; the effectiveness of our internal control over financial reporting; and other risks that are described in HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2023 and HP's other filings with the Securities and Exchange Commission ("SEC"). HP's fiscal 2023 plan includes HP's efforts to take advantage of future growth opportunities, including but not limited to, investments to drive growth, investments in our people, improving product mix, driving structural cost savings and other productivity measures. Structural cost savings represent gross reductions in costs driven by operational efficiency, digital transformation, and portfolio optimization. These initiatives include but are not limited to workforce reductions, platform simplification, programs consolidation and productivity measures undertaken by HP, which HP expects to be sustainable in the longer-term. These structural cost savings are net of any new recurring costs resulting from these initiatives and exclude one-time investments to generate such savings. HP's expectations on the longer-term sustainability of such structural cost savings are based on its current business operations and market dynamics and could be significantly impacted by various factors, including but not limited to HP's evolving business models, future investment decisions, market environment and technology landscape. As in prior periods, the financial information set forth in this document, including any tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be reasonable, these amounts could differ materially from reported amounts in HP's Quarterly Report on Form 10-Q for the fiscal quarter ending July 31, 2024, Annual Report on Form 10-K for the fiscal year ending October 31, 2024, and HP's other filings with the SEC. The forward-looking statements in this document are made as of the date of this document and HP assumes no obligation and does not intend to update these forward-looking statements. HP's Investor Relations website at investor.hp.com contains a significant amount of information about HP, including financial and other information for investors. HP encourages investors to visit its website from time to time, as information is updated, and new information is posted. The content of HP's website is not incorporated by reference into this document or in any other report or document HP files with the SEC, and any references to HP's website are intended to be inactive textual references only. Editorial contacts HP Inc. Media HP Inc. Investor HP INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF EARNINGS(Unaudited)(In millions, except per share amounts)     Three months ended   April 30, 2024   January 31, 2024   April 30, 2023 Net revenue:(a)           Products $ 12,043     $ 12,419     $ 12,149   Services   757       766       758   Total net revenue   12,800       13,185       12,907   Cost of revenue:(a)           Products   9,324       9,871       9,557   Services   453       426       436   Total cost of revenue   9,777       10,297       9,993   Research and development   436       399       410   Selling, general and administrative   1,462       1,383       1,397   Restructuring and other charges   71       63       200   Acquisition and divestiture charges   22       27       74   Amortization of intangible assets   80       81       86   Total cost and expenses   11,848       12,250       12,160   Earnings from operations   952       935       747   Interest and other, net   (155 )     (142 )     (160 ) Earnings before taxes   797       793       587   (Provision for) benefit from taxes   (190 )     (171 )     467   Net earnings $ 607     $ 622     $ 1,054               Net earnings per share:           Basic $ 0.62     $ 0.63     $ 1.06   Diluted $ 0.61     $ 0.62     $ 1.06               Cash dividends declared per share $ —     $ 0.55     $ —               Weighted-average shares used to compute net earnings per share:           Basic   984       995       991   Diluted   990       1,002       998     (a) Effective first quarter of fiscal 2024, HP presents consolidated net revenue and cost of revenue bifurcated between products and services. HP has reflected this change to its prior reporting periods on an as-if basis. The reporting change had no impact to previously reported segment net revenue, consolidated net revenue, earnings from operations, net earnings or net earnings per share ("EPS"). Services include revenues from support and maintenance contracts and other services, and excludes product hardware and supplies revenues associated with as-a-service offerings and instant ink subscriptions which are categorized within product revenues.   HP INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF EARNINGS(Unaudited)(In millions, except per share amounts)     Six months ended   April 30, 2024   April 30, 2023 Net revenue:(a)       Products $ 24,462     $ 25,193   Services   1,523       1,512   Total net revenue   25,985       26,705   Cost of revenue:(a)       Products   19,195       20,146   Services   879       858   Total cost of net revenue   20,074       21,004   Research and development   835       813   Selling, general and administrative   2,845       2,728   Restructuring and other charges   134       341   Acquisition and divestiture charges   49       158   Amortization of intangible assets   161       171   Total cost and expenses   24,098       25,215   Earnings from operations   1,887       1,490   Interest and other, net   (297 )     (341 ) Earnings before taxes   1,590       1,149   (Provision for) benefit from taxes   (361 )     374   Net earnings $ 1,229     $ 1,523           Net earnings per share:       Basic $ 1.24     $ 1.54   Diluted $ 1.23     $ 1.53           Cash dividends declared per share $ 0.55     $ 0.53           Weighted-average shares used to compute net earnings per share:       Basic   990       990   Diluted   996       997     (a) Effective first quarter of fiscal 2024, HP presents consolidated net revenue and cost of revenue bifurcated between products and services. HP has reflected this change to its prior reporting periods on an as-if basis. The reporting change had no impact to previously reported segment net revenue, consolidated net revenue, earnings from operations, net earnings or net EPS. Services include revenues from support and maintenance contracts and other services, and excludes product hardware and supplies revenues associated with as-a-service offerings and instant ink subscriptions which are categorized within product revenues.   HP INC. AND SUBSIDIARIESADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE(Unaudited)(In millions, except per share amounts)     Three months ended   April 30, 2024   January 31, 2024   April 30, 2023   Amounts   Dilutednet earningsper share   Amounts   Dilutednet earningsper share   Amounts   Dilutednet earningsper share GAAP net earnings $ 607     $ 0.61   $ 622     $ 0.62   $ 1,054     $ 1.06   Non-GAAP adjustments:                       Restructuring and other charges   71       0.07     63       0.06     200       0.20   Acquisition and divestiture charges   22       0.02     27       0.03     74       0.07   Amortization of intangible assets   80       0.08     81       0.08     86       0.09   Non-operating retirement-related credits   (3 )     —     (2 )     —     (13 )     (0.01 ) Tax adjustments(a)   35       0.04     17       0.02     (616 )     (0.62 ) Non-GAAP net earnings $ 812     $ 0.82   $ 808     $ 0.81   $ 785     $ 0.79                           GAAP earnings from operations $ 952         $ 935         $ 747       Non-GAAP adjustments: