HP Inc. posted a 2.4% increase in net revenue to $13.52 billion, for the third quarter ended 31 July, 2024, compared to $13.2 billion in the year-earlier period. The American multinational IT giant expects $53.7 billion in revenue for the year.
HP’s printing net revenue was $4.1 billion, down 3% year-on-year with a 17.3% operating margin. Though the consumer printing net revenue showed an uptick of 2% year-on-year to $293 million, the net revenue of the firm’s commercial printing division was down 5% at $1.15 billion. Supplies net revenue was down 2% year-on-year to $2.7 billion.
While total hardware units were down 2%, commercial printing units fell 4%, with flat revenue growth for consumer printing units.
HP’s Personal Systems net revenue was $9.4 billion, up 5% year-on-year, with a 6.4% operating margin. Consumer PS net revenue was down 1% and Commercial PS net revenue was up 8%. Total units were up 1% with Consumer PS units down 6% and Commercial PS units up 6%.
“We are pleased with our return to revenue growth and proud of the innovations delivered in the quarter, including the launch of our next-generation AI PC lineup. We remain focused on our strategic plan and will prioritize opportunities that drive long-term profitable growth, while taking decisive action to navigate a dynamic environment,” says Enrique Lores, President & CEO, HP Inc.
In an August report by investment firm Bernstein, HP has been touting AI PCs as drivers of “a huge change in the industry structure and could be a 10-20% tailwind to PC average selling prices (ASPs) overall with penetration reaching 40-60% through 2026, leading to an estimated 200 bps tailwind to annual revenue growth each year for the next three years.” AI PCs generated about 20% of PC revenue in the quarter.
HP’s net cash provided by operating activities in the third quarter of fiscal 2024 was $1.4 billion. Accounts receivable ended the quarter at $4.7 billion, flat quarter over quarter at 31 days. Inventory ended the quarter at $7.8 billion, down 3 days quarter over quarter to 67 days. Accounts payable ended the quarter at $15.4 billion, down 1 day quarter over quarter to 131 days.
HP generated $1.3 billion of free cash flow in the third quarter. Free cash flow includes net cash provided by operating activities of $1.4 billion adjusted for net investments in leases from integrated financing of $42 million and net investments in property, plant, and equipment of $162 million.
For fiscal 2024, HP anticipates generating free cash flow in the range of $3.1 to $3.6 billion. The Palo Alto, California-based company also increased its share repurchase authorization to $10 billion.
