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HP (HPQ) Issues Outlook for Fiscal 2022, Hikes Dividend

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HP Inc. (HPQ - Free Report) recently announced an annual dividend hike and provided financial guidance for fiscal 2022 during its latest Security Analyst Meeting (“SAM”). The personal computer manufacturer reiterated its fiscal 2021 outlook.

For fiscal 2022, the company expects adjusted non-GAAP earnings to be $4.07-$4.27 per share, higher than the fiscal 2021 range of $3.69-$3.75 per share. Notably, fiscal 2022’s estimated earnings range exclude charges related to restructuring, acquisitions, amortization of intangible assets, along with non-operating retirement-related charges, tax adjustments and related tax impacts on these items of 21 cents per share.

The company expects to generate a minimum of $4.5 billion free cash flow during the fiscal year. It anticipates distributing 100% of the free cash flow generated in the full fiscal through share repurchases and dividend payouts to its shareholders.

HP’s board of directors approved a record hike in its annual dividend to $1 per share, reflecting an increase of 29% from the prior payout. This increase in dividend highlights the Palo Alto-based leading personal computer and printing company’s financial strength and its expectation of generating enough earnings and distributable cash flow to reward shareholders with high yields.

The company reported robust bottom-line results in third-quarter fiscal 2021, with non-GAAP earnings jumping more than two-fold to $1 per share from 49 cents reported in the year-ago quarter. The figure not only surpassed the Zacks Consensus Estimate of 84 cents per share but also outpaced management’s guidance of 81-85 cents.

Net revenues increased 7% year over year to $15.3 billion but missed the consensus mark of $15.81 billion. The sluggish sales growth was primarily due to persistent component supply-chain constraints, COVID-related factory shutdowns across Southeast Asia, and transportation disruptions and congested ports.

HP Inc. Price and Consensus HP Inc. Price and Consensus

HP Inc. price-consensus-chart | HP Inc. Quote

Zacks Rank & Other Key Picks

HP currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Some other top-ranked stocks in the broader computer and technology sector are Salesforce (CRM - Free Report) , TD SYNNEX (SNX - Free Report) and Infineon Technologies (IFNNY - Free Report) , all sporting a Zacks Rank #1, at present.

The long-term earnings growth rates for Salesforce, TD SYNNEX and Infineon are currently pegged at 16.8, 10.4% and 33.0%, respectively.

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