TLDR
- Revenue climbs, but cautious guidance pulls HP’s stock sharply lower.
- AI-driven PC gains lift Q1 results even as printing revenue weakens.
- Cash flow rises, supporting buybacks and dividends despite mixed trends.
- Cost pressures and regulations push HP’s EPS forecast toward low end.
- Market reacts to softer outlook, overshadowing the quarter’s revenue gains.
HP Inc. (HPQ) shares reported mixed first-quarter results as revenue improved but guidance signaled softer earnings ahead. HPQ closed at $18.20, dropping by 0.82% and fell after hours to 6.65%. The company posted stronger cash flow, yet the projected earnings range set a restrained tone.
Revenue Strength Supports Early Momentum
HP recorded first-quarter revenue of $14.4 billion as demand improved across core units. The company delivered higher Personal Systems sales, and the performance helped offset weaker printing trends. Both categories shaped overall growth, and steady product traction supported the broader result.
The company reported GAAP EPS of $0.58 which decreased slightly from last year. Yet non-GAAP EPS reached $0.81 and marked a clear improvement from the prior period. This gap reflected ongoing restructuring activity, and adjusted results continued to reflect operational consistency.
Revenue gains appeared strongest in Personal Systems as AI-enabled devices supported unit expansion. Consumer systems shipments increased notably, and commercial demand followed with solid growth. Printing revenue declined year over year, and lower hardware volumes continued to weigh on the segment.
Cash Flow Rises as Capital Actions Remain Steady
HP generated $383 million in operating cash flow and continued to control working capital. Inventory increased slightly, yet accounts receivable improved and helped strengthen the quarter. Accounts payable rose modestly, and these shifts formed a balanced cash position.
Free cash flow reached $175 million as spending on equipment and leases affected total output. The company maintained shareholder returns and repurchased 13.3 million shares during the quarter. Dividend payments totaled $277 million, and buybacks reached $325 million in the same period.
The company ended the quarter with $3.2 billion in gross cash as liquidity stayed stable. Short-term investments remained minimal, and the balance sheet supported ongoing capital planning. Cash levels aligned with operational needs, and the company prioritized flexibility during a changing environment.
Guidance Signals Pressure as Costs Influence Forecast
HP expects second-quarter GAAP EPS between $0.52 and $0.58 as cost pressures persist. Non-GAAP EPS should range from $0.70 to $0.76 and reflect continued adjustments. These projections incorporate regulatory effects, and management plans mitigation measures.
Full-year guidance remains in place though the company expects results near the low end. GAAP EPS should fall between $2.47 and $2.77, and non-GAAP EPS between $2.90 and $3.20. The company anticipates free cash flow of $2.8 billion to $3.0 billion, and current trends point toward the lower range.
Market reaction followed the softer earnings path as the after-hours decline signaled immediate pressure. Revenue gains supported confidence, yet rising memory costs shaped expectations for upcoming quarters. The company continues to advance its product strategy, and long-term positioning remains central to its outlook.
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