On November 21, 2023, HP Inc (HPQ, Financial) released its 8-K filing, detailing its fiscal 2023 full year and fourth quarter results. The company faced a challenging market environment, with a significant decline in annual net revenue, which dropped by 14.6% to $53.7 billion. Despite the revenue downturn, HP Inc (HPQ) managed to exceed its GAAP diluted net earnings per share (EPS) expectations for the year, reporting $3.26 against a forecasted range of $2.95 to $3.07 per share.
Fiscal Year 2023 Financial Highlights
HP Inc (HPQ, Financial) reported a mixed financial performance for the fiscal year 2023. The company's net revenue saw a considerable year-over-year decrease, falling to $53.7 billion. This decline was coupled with a reduction in net cash provided by operating activities, which stood at $3.6 billion, and a 20% decrease in free cash flow to $3.1 billion. Despite these challenges, HP Inc (HPQ) managed to retire $1.6 billion in long-term debt and returned $1.1 billion to shareholders through dividends and share repurchases.
Fourth Quarter Fiscal 2023 Performance
The fourth quarter continued the trend of declining revenues, with a 6.5% drop to $13.8 billion compared to the same period last year. However, GAAP diluted net EPS for the quarter was $0.97, showing a significant improvement from the $(0.02) reported in the prior-year period and surpassing the outlook of $0.65 to $0.77 per share. Non-GAAP diluted net EPS also saw an increase to $0.90, up from $0.82 year over year.
Segment Results and Future Outlook
HP Inc (HPQ, Financial)'s Personal Systems segment experienced an 8% decline in net revenue, while the Printing segment's revenue decreased by 3%. Despite these decreases, the company's operating margins remained resilient, with the Printing segment achieving an 18.9% operating margin. Looking ahead, HP Inc (HPQ) estimates GAAP diluted net EPS for the fiscal 2024 first quarter to be in the range of $0.60 to $0.70 and non-GAAP diluted net EPS to be between $0.76 and $0.86. The company also anticipates generating free cash flow in the range of $3.1 to $3.6 billion for fiscal 2024.
Management Commentary
Enrique Lores, HP President and CEO, commented on the year's performance, stating,
2023 was a year of steady progress. We executed well in a tough market and innovated in our key growth areas to finish the year with good momentum,"and emphasized the company's focus on long-term sustainable growth. CFO Marie Myers highlighted the company's solid quarter of sequential growth and strong free cash flow, noting a commitment to driving profitable growth and returning 100% of free cash flow to shareholders.
Financial Position and Shareholder Returns
HP Inc (HPQ, Financial) ended the fiscal year with a strong balance sheet, generating substantial free cash flow and maintaining disciplined capital allocation. The company's commitment to shareholder returns was evident, with a total of $1.1 billion returned through dividends and share repurchases during the year. The board of directors also declared a quarterly cash dividend increase of 5% for the first quarter of fiscal 2024.
For a more detailed analysis of HP Inc (HPQ, Financial)'s financial results, including additional financial tables and an earnings overview presentation, interested parties can visit the Investor Relations section of HP's website. The company's FY23 Q4 earnings conference call is also available for replay via audio webcast.
Value investors and potential GuruFocus.com members seeking comprehensive insights into HP Inc (HPQ, Financial)'s financial health can find further information and stay updated on the company's performance by visiting GuruFocus.com.
Explore the complete 8-K earnings release (here) from HP Inc for further details.
