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HP (HPQ) Posts Q3 Earnings Beat, Down 4.5% on Weak Outlook

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HP Inc. (HPQ - Free Report) just released its third quarter fiscal 2016 earnings results, posting earnings of 48 cents and revenue of $11.9 billion. 

Currently, HPQ has a Zacks Rank #3 (Hold). HPQ was down over 4.5% to $13.75 in after-hours trading shortly after its earnings report was released.                                                    

Beat earnings estimates. The company posted diluted net earnings of 48 cents per share, surpassing the Zacks Consensus Estimate of 45 cents per share.

Beat revenue estimates. The company saw revenue figures of $11.9 billion, edging past our consensus estimate of $11.397 billion but decreasing 4% year-over-year.

Personal Systems net revenue was flat year-over-year, with a 4.4% operating margin. Total units increased 4%; notebook units were up 12% and desktop units were down 6%. Printing net revenue declined 14% year-over-year, with a 20.4% operating margin.

HP returned $269 million to its shareholders through share repurchases and dividends.

“In Q3, we delivered on our financial commitments and continued to make solid progress in executing against our core, growth and future strategic framework,” said Dion Weisler, President and CEO, HP Inc. “Although the markets remain challenged, we have the innovation and executional rigor needed to continue to take profitable share and invest in the right opportunities to drive long-term success for the company.”

Looking ahead, HP estimates Q4 non-GAAP diluted net EPS to be in the range of 34 cents to 37 cents, and for fiscal 2016, the company is forecasting non-GAAP diluted net EPS to be in the range of $1.59 to $1.62.

Here’s a graph that looks at HP’s price, consensus, and EPS surprise:

HP INC Price, Consensus and EPS Surprise

HP INC Price, Consensus and EPS Surprise | HP INC Quote

 

HP Inc. is the surviving entity following the November 2015 split of Hewlett-Packard Company into publicly traded entities - Hewlett Packard Enterprise Company and HP Inc. The company's focus will be on the PC and printing products and services. HP Inc. is headquartered in Palo Alto, California.

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