HP Q4 Results Deflate Retail Mood: Stock Sinks Over 8% As In-Line Quarterly Results, Sub-par Guidance Worry Traders

HP, Inc. ($HPQ) shares fell sharply in Wednesday’s premarket session after the Palo Alto-based company announced fiscal year 2024 fourth-quarter results roughly in line with expectations and running quarter guidance that trailed, reflecting the ongoing weakness in the global PC industry. 

The manufacturer of personal computing, printing, 3D printing, and gaming products, said its fourth-quarter non-GAAP earnings per share came in at $0.93, within the guidance range of $0.89-$0.99 and in line with the consensus.

Net revenue rose a modest 1.7% year-over-year (YoY) to $14.1 billion compared to the $13.99 billion consensus estimate. Personal systems net revenue climbed 2% to $9.6 billion, representing around 68% of the total, and printing net revenue was up 1%.

Estimates from Gartner showed global PC shipments falling 1.3% YoY to 62.9 million units in the third quarter, with HP’s shipments seeing a marginal YoY drop.

Enrique Lores, HP President and CEO, said, "We are pleased with our Q4 performance where we saw revenue growth for the second consecutive quarter, driven by steady progress in Personal Systems and Print."

HP said it returned $1.2 billion to shareholders in the form of share repurchase and dividends. 

The company announced a 5% increase to its annual dividend. The board declared a $0.2894 quarterly dividend, payable on Jan. 2, 2025, to shareholders of record as of Dec. 11, 2024.

Looking ahead, HP expects non-GAAP EPS of $0.70-$0.76 for the first quarter of the fiscal year 2025 and $3.45-$3.75 for the full year. Analysts, on average, expect the metrics to come in at $0.82 and $3.60, respectively. 

CFO Karen Parkhill said, “As we look ahead, we are well positioned to deliver solid growth across revenue, non-GAAP net earnings, EPS and free cash flow in FY25.”

As of 8:30 a.m. ET in premarket trading, HP shares were trading down 8.26% at $35.87. The stock, though, has gained over 33% so far this year.

HP sentiment and message volume November 25, 2024, premarket as of 8:30 am ET | Source: Stocktwits

On Stocktwits platform, sentiment toward the stock flipped to ‘extremely bearish’ (5/100) from ‘extremely bullish,’ marking a year-low. Meanwhile, message volume climbed further into the ‘extremely high’ (97/100) territory, the highest it has been this year.

Rival Dell Technologies, Inc. ($DELL), despite the post-earnings plunge, was viewed more positively by retailers, given its exposure to artificial intelligence servers.