HPQ's Q3 Earnings Match Estimates, Revenues Increase Y/Y

HP Inc. HPQ reported third-quarter fiscal 2025 earnings of 75 cents per share, in line with the Zacks Consensus Estimate. This compares to earnings of 84 cents per share a year ago. These figures are adjusted for non-recurring items.

HP’s earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, the average negative surprise being 4.3%.

HPQ posted revenues of $13.93 billion for the quarter ended July 2025, missing the Zacks Consensus Estimate by 0.19%. This compares to the year-ago revenues of $13.52 billion.

HPQ’s Q2 Top-Line Details

Personal Systems (PS) revenues (71% of net revenues) came in at $9.9 billion, up 6% year over year (6% in constant currency). The upside in this division was mainly driven by both commercial and consumer strength, higher ASPs, and momentum in Key Growth Areas.

HP Inc. Price, Consensus and EPS Surprise

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

HP’s total PC units rose 5%, with Consumer PS shipments up 8% and Commercial PS shipments up 3%. On the revenue side, Consumer PS grew 8%, while Commercial PS increased 5%.

The Printing business (29% of net revenues) generated $4.0 billion, down 4% year over year (down 3% in constant currency). Weakness in Supplies and Commercial Printing led to the decline. Consumer Printing revenues fell 8%, Commercial Printing revenues declined 3%, and Supplies revenues dropped 4% (3% in CC). Total hardware units were down 9%, with Consumer Printing units down 8% and Commercial Printing units down 12%.

By geography, HP posted revenue growth in all regions. On a constant currency basis, the Americas rose 1.1%, EMEA was up 1.1%, and Asia Pacific & Japan grew 11% year over year.

Operating Results

Segment-wise, Personal Systems’ (PS) non-GAAP operating margin was 5.4%, down 120 basis points year over year. The Printing division’s non-GAAP operating margin stood at 17.3%, flat year over year despite revenue softness.

HP’s overall non-GAAP operating margin from continuing operations was 7.1%, contracting 110 bps compared to the prior-year quarter.

Balance Sheet and Cash Flow

HP ended the fiscal third quarter with cash and cash equivalents of $2.9 billion and restricted cash of $3 million, up from $2.7 billion at the end of the previous quarter. During the quarter, HP generated $1.66 billion of cash from operating activities and delivered $1.47 billion in free cash flow compared with negative free cash flow in the prior quarter.

During the third quarter, the company returned $400 million to shareholders through dividends and share repurchases. Year to date, HP has generated $1.44 billion in free cash flow.

HP’s Q4 and FY25 Guidance

For the fourth quarter of fiscal 2025, the company expects non-GAAP EPS between 87 cents and 97 cents. The Zacks Consensus Estimate for HPQ’s fourth-quarter fiscal 2025 revenues is pegged at 89 cents. HPQ anticipates its free cash flow for fiscal 2025 in the range of $2.6-$3.0 billion.

HPQ’s Zacks Rank and Stocks to Consider

HPQ currently has a Zacks Rank #3 (Hold).

Alkami Technology ALKT, Arista Networks ANET and Amphenol APH are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. While ANET and ALKT carry a Zacks Rank #2 (Buy) each, APH sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkami Technology shares have lost 34.5% year to date. The Zacks Consensus Estimate for Alkami Technology’s full-year 2025 earnings is pegged at 15 cents per share, up by 2 cents over the past 30 days, implying growth of 51.7% from the year-ago quarter’s reported figure.

Arista Networks shares have lost 11.9% year to date. The Zacks Consensus Estimate for ANET’s full-year fiscal 2025 earnings is pegged at 65 cents per share, up by a penny in the past 30 days, indicating year-over-year growth of 13.66%.

Amphenol shares have gained 45.1% year to date. The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $2.69 per share in the past seven days, indicating year-over-year growth of 42.33%.

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This article originally published on Zacks Investment Research (zacks.com).

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