HP Inc. (HPQ Quick QuoteHPQ - Free Report) reported fourth-quarter fiscal 2024 non-GAAP earnings of 93 cents per share, which missed the Zacks Consensus Estimate by 1.1%. The figure rose 3.3% year over year.

HPQ’s earnings beat the Zacks Consensus Estimate in one of the trailing four quarters, missed twice and matched once, the average negative surprise being 0.83%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

HPQ’s revenues increased 1.7% year over year to $14.06 billion but marginally missed the Zacks Consensus Estimate by 0.36%.

Following its lower-than-expected fourth-quarter results, HPQ shares have lost 7.44% in the after-market hours on Nov. 26. Shares of HPQ have gained 30% year to date, outperforming the Zacks Computer - Micro Computers industry's growth of 22.2%. However, its weak performance and soft guidance for the first quarter and fiscal 2025 could weigh on the stock, potentially dragging shares down.

Q4 Details of HPQ

Personal Systems (PS) revenues (68.2% of net revenues) came in at $9.6 billion, which improved 2.1% from the year-ago quarter’s figure (2.6% up at cc). The growth in this division was mainly due to revenue growth from commercial unit performance and market share gains in Personal Systems.

HP’s total PC units sold were up 1% on a year-over-year basis, mainly driven by a 4% increase in Commercial PS shipments, offset by a decline of 3% in Consumer PS shipments. Revenues from the Commercial PS segment increased 5% year over year, while the Consumer PS segment sales declined 4%.

The printing business’ revenues (31.7% of net revenues) increased 0.8% year over year (up 1.5% at cc) to $4.45 billion. The Print business saw growth for the first time in the past 12 quarters, mainly driven by improvement in Consumer Printing and Supplies, partially offset by a decline in Commercial Printing.

Consumer Printing net revenues improved 3%, while Commercial Printing net revenues declined 1%. Supplies net revenues were up 2% (up 3% in constant currency) year over year. Total hardware units increased 9.5% overall.

On a reported basis, region-wise, the Americas rose 2.5% and the EMEA region witnessed growth of 2.1% in revenues. The Asia Pacific and Japan revenues grew 0.6% year over year.

Operating Results of HP

Segment-wise, PS’ non-GAAP operating margin contracted 100 basis points (bps) to 5.7%. The decline was due to headwinds from higher commodity costs and investment in strategic initiatives.

The Printing division’s non-GAAP operating margin expanded 70 bps to 19.6%.

HP’s overall non-GAAP operating margin from continuing operations of 8.5% contracted 50 bps year over year.

HPQ’s Balance Sheet and Cash Flow

The company ended the fiscal fourth quarter with cash, cash equivalents and restricted cash of $3.25 billion, down from $3.73 billion at the end of the previous quarter.

During the quarter, HPQ generated $1.62 billion worth of cash from operational activities and $1.5 billion in free cash flow. HP returned $1.2 billion to its shareholders in the form of share repurchases and cash dividends.

HP’s Q1 and FY25 Guidance

For the first quarter of fiscal 2025, the company estimates non-GAAP EPS between 70 cents and 76 cents (midpoint 73 cents). The Zacks Consensus Estimate is pegged at 87 cents.

For fiscal 2025, the company expects its non-GAAP EPS between $3.06 and $3.36 (midpoint $3.21). The Zacks Consensus Estimate is pegged at $3.59 per share.

HPQ expects its free cash flow in the range of $3.2-$3.6 billion for fiscal 2025.

Zacks Rank & Stocks to Consider

Currently, HPQ carries a Zacks Rank #3 (Hold).

NVIDIA (NVDA Quick QuoteNVDA - Free Report) , Amphenol (APH Quick QuoteAPH - Free Report) and Celestica (CLS Quick QuoteCLS - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.

NVDA, APH and CLS carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The consensus mark for NVIDIA’s 2025 earnings has been revised upward by 9 cents to $2.93 per share over the past seven days, indicating a 111% year-over-year decline. NVDA shares have rallied 176.5% year to date.

The consensus mark for Amphenol’s 2024 earnings has been revised upward by 2 cents to $1.17 per share over the past seven days, indicating a 58% year-over-year increase. The long-term expected earnings growth rate for the stock is 42.60%. APH shares have jumped 43% year to date.

The consensus mark for Celestica’s 2024 earnings has been revised upward by 20 cents to $3.85 per share over the past 30 days, indicating a 58.4% year-over-year increase. CLS shares have skyrocketed 197.1% year to date.