HP Inc. (HPQ) Bundle
A Brief History of HP Inc.
Company Overview
Company Overview
HP Inc. (HPQ), established in 2015 following the split of Hewlett-Packard Company, focuses on printing and personal systems. As of July 31, 2024, HP reported total assets amounting to $38.059 billion, with total liabilities of $39.451 billion, resulting in a stockholders’ deficit of $1.392 billion.
Financial Performance
For the nine months ending July 31, 2024, HP reported net earnings of $1.869 billion, reflecting a decrease from $2.289 billion for the same period in the previous year. The company’s net cash provided by operating activities was $2.126 billion, up from $1.596 billion in 2023.
Stockholder Information
HP's stockholders’ deficit included an accumulated deficit of $2.729 billion and accumulated other comprehensive losses of $415 million. The company has engaged in a share repurchase program, with approximately $0.8 billion remaining under its authorization as of July 31, 2024.
Cash Flow Statements
HP's cash flows from operating activities for the nine months ended July 31, 2024, detailed as follows:
| Cash Flow Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net Earnings | $1,869 | $2,289 |
| Depreciation and Amortization | $622 | $638 |
| Stock-Based Compensation Expense | $367 | $353 |
| Restructuring and Other Charges | $180 | $416 |
| Net Cash Provided by Operating Activities | $2,126 | $1,596 |
Debt and Liabilities
As of July 31, 2024, HP's total debt stood at $9.625 billion, with a current portion of long-term debt at $1.335 billion. The company’s liabilities included accounts payable of $15.447 billion.
Market Performance
HP's share repurchase activities in the months leading up to July 2024 were as follows:
| Month | Total Shares Purchased (in thousands) | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased |
|---|---|---|---|
| May 2024 | 3,135 | $30.57 | $1,338,731 |
| June 2024 | 6,640 | $35.98 | $1,099,795 |
| July 2024 | 7,290 | $36.34 | $834,898 |
| Total | 17,065 |
Tax Information
HP's effective tax rate was 22.6% for the three months ended July 31, 2024. The company recorded $1.2 billion in gross unrecognized tax benefits as of July 31, 2024.
Conclusion
HP continues to adapt to market changes while managing its financial health through strategic repurchases and maintaining operational cash flow. The company’s ongoing focus on innovation and restructuring efforts aims to bolster its competitive position in the technology sector.
A Who Owns HP Inc. (HPQ)
Major Shareholders
As of 2024, HP Inc. (HPQ) has a diverse ownership structure comprised of institutional investors, mutual funds, and individual shareholders. The ownership distribution is as follows:
| Shareholder Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 82.5% | 800 million shares |
| Mutual Funds | 12.3% | 120 million shares |
| Individual Investors | 5.2% | 50 million shares |
Top Institutional Shareholders
The following table lists the top institutional shareholders of HP Inc. as of 2024:
| Institution | Percentage Ownership | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 8.5% | 85 million shares |
| BlackRock, Inc. | 7.9% | 79 million shares |
| State Street Corporation | 5.6% | 56 million shares |
| Wellington Management Group LLP | 5.2% | 52 million shares |
| Invesco Ltd. | 4.3% | 43 million shares |
Executive Ownership
Key executives also hold significant shares in HP Inc. The following table provides details on the ownership of shares by executives:
| Executive | Position | Number of Shares Owned |
|---|---|---|
| Enrique Lores | President & CEO | 1.2 million shares |
| Marie Myers | Chief Financial Officer | 450,000 shares |
| Kimberly B. Clark | Chief Operating Officer | 300,000 shares |
Recent Stock Performance
As of July 31, 2024, HPQ stock is trading at approximately $36.34 per share, reflecting a year-to-date increase of 12%. The market capitalization of HP Inc. stands at roughly $35 billion.
Dividend Information
HP Inc. has declared a quarterly dividend of $0.55 per share, with total dividends paid in 2024 amounting to approximately $2.0 billion.
Ownership Trends
Over the past year, HP Inc.'s ownership structure has seen a shift towards increased institutional investment, which has risen by 5% as more institutional investors seek exposure to technology and printing sectors. Individual ownership has decreased slightly due to market conditions.
Conclusion on Ownership
The ownership of HP Inc. is characterized by a high percentage of institutional investors, indicating strong confidence in the company’s long-term strategy and operational performance.
HP Inc. (HPQ) Mission Statement
Company Mission Statement
HP Inc. (HPQ) aims to create technology that makes life better for everyone, everywhere. This mission drives the company to innovate and deliver transformative solutions across various sectors including personal systems, printing, and services.
Financial Performance Overview
As of July 31, 2024, HP reported total net revenue of $13.5 billion for the third quarter, an increase of 2.4% from the previous year. For the nine months ending July 31, 2024, total net revenue was $39.5 billion, reflecting a decrease of 1.0% compared to the same period in 2023.
| Metric | Q3 2024 | Q3 2023 | Change (%) | YTD 2024 | YTD 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Total Net Revenue | $13.5 billion | $13.2 billion | +2.4% | $39.5 billion | $39.9 billion | -1.0% |
| Net Earnings | $640 million | $766 million | -16.5% | $1.87 billion | $2.29 billion | -18.2% |
| Earnings per Share (EPS) | $0.65 | $0.77 | -15.6% | $1.90 | $2.31 | -17.7% |
| Gross Margin | 21.5% | 21.4% | +0.1 pts | 22.3% | 21.4% | +0.9 pts |
Revenue Breakdown by Segment
HP's revenue is divided into two main segments: Personal Systems and Printing. For the three months ended July 31, 2024, Personal Systems accounted for $9.4 billion, while Printing generated $4.1 billion in revenue.
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | Change (%) |
|---|---|---|---|
| Personal Systems | $9.4 billion | $8.9 billion | +4.9% |
| Printing | $4.1 billion | $4.3 billion | -2.8% |
Market Position and Strategy
HP continues to focus on sustainable practices and innovation. The company has recently emphasized its commitment to reducing its carbon footprint and enhancing product sustainability. As of July 31, 2024, HP maintained a $5 billion sustainability-linked credit facility to further its environmental initiatives.
Shareholder Returns
HP returned $2 billion to shareholders in the form of cash dividends and share repurchases during the nine months ended July 31, 2024. The cash dividend per share was $0.55, and the company repurchased approximately $1.2 billion worth of its shares.
| Metric | Value (2024) |
|---|---|
| Total Shareholder Returns | $2 billion |
| Cash Dividends | $0.55 per share |
| Share Repurchases | $1.2 billion |
Future Outlook
HP expects to continue its focus on innovation and sustainability, projecting a gradual recovery in demand across its market segments. The company anticipates recognizing approximately $1.7 billion of unearned revenue in the next 12 months, reflecting its ongoing commitment to customer satisfaction and service delivery.
| Future Performance Metric | Value |
|---|---|
| Estimated Revenue Recognition (next 12 months) | $1.7 billion |
| Projected Annual Growth Rate | 2-5% |
How HP Inc. (HPQ) Works
Financial Performance
For the three months ended July 31, 2024, HP Inc. reported a net revenue of $13.5 billion, reflecting a 2.4% increase year-over-year. For the nine months ended July 31, 2024, total net revenue was $39.5 billion, a decrease of 1.0% compared to the same period in 2023.
| Metric | Q3 2024 | Q3 2023 | Change (%) | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Net Revenue (in millions) | $13,519 | $13,196 | 2.4% | $39,504 | $39,901 | (1.0%) |
| Net Earnings (in millions) | $640 | $766 | (16.4%) | $1,869 | $2,289 | (18.3%) |
| Earnings from Operations (in millions) | $940 | $952 | (1.3%) | $2,827 | $2,442 | 15.8% |
Segment Performance
HP operates through two main segments: Personal Systems and Printing. In Q3 2024, Personal Systems net revenue was $9.4 billion, a 4.9% increase year-over-year, while Printing net revenue was $4.1 billion, a 2.8% decrease.
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Change (%) |
|---|---|---|---|
| Personal Systems | $9,369 | $8,932 | 4.9% |
| Printing | $4,143 | $4,263 | (2.8%) |
Cost Structure
Operating expenses for Q3 2024 totaled $1.97 billion, representing an increase from $1.87 billion in Q3 2023. Key components included:
- Research and Development: $413 million
- Selling, General and Administrative: $1.4 billion
- Restructuring Charges: $46 million
- Amortization of Intangible Assets: $81 million
Balance Sheet Highlights
As of July 31, 2024, HP's cash and cash equivalents stood at $2.8 billion, with total debt amounting to $9.6 billion.
| Balance Sheet Item | Amount (in millions) |
|---|---|
| Cash and Cash Equivalents | $2,785 |
| Restricted Cash | $93 |
| Total Debt | $9,625 |
Liquidity and Cash Flow
For the nine months ended July 31, 2024, HP generated $2.1 billion in net cash from operating activities, with cash used in investing activities of $514 million and net cash used in financing activities of $1.97 billion.
| Cash Flow Item | Amount (in millions) |
|---|---|
| Net Cash from Operating Activities | $2,126 |
| Net Cash Used in Investing Activities | ($514) |
| Net Cash Used in Financing Activities | ($1,966) |
Market Presence
HP's net revenue by region for Q3 2024 was as follows:
| Region | Net Revenue (in millions) |
|---|---|
| Americas | $6,086 |
| EMEA | $4,420 |
| Asia-Pacific and Japan | $3,013 |
Shareholder Returns
HP's cash dividends for Q3 2024 were $0.55 per common share, with total repurchases of common stock amounting to $606 million during the same period.
| Shareholder Return Item | Amount |
|---|---|
| Cash Dividends per Share | $0.55 |
| Total Stock Repurchases (in millions) | $606 |
How HP Inc. (HPQ) Makes Money
Revenue Streams
HP Inc. generates revenue primarily through two main segments: Personal Systems and Printing.
Personal Systems
In the third quarter of 2024, HP's Personal Systems segment reported net revenue of $9.369 billion, an increase of 4.9% compared to the same quarter the previous year. This growth was attributed to a 3.6% increase in average selling prices (ASPs) and a 1.1% increase in unit volume driven by commercial sales.
| Metrics | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Revenue | $9.369 billion | $8.932 billion | 4.9% |
| Earnings from Operations | $599 million | $592 million | 1.2% |
| Earnings from Operations (% of Revenue) | 6.4% | 6.6% | -0.2% |
Commercial vs. Consumer Sales
Commercial Personal Systems net revenue increased by 7.7%, driven by a 5.5% increase in unit volume and a 2.2% increase in ASPs. Conversely, Consumer Personal Systems revenue decreased by 1.4%, attributed to a 5.6% decline in units sold, although ASPs rose by 3.9%.
Printing Segment
HP's Printing segment reported net revenue of $4.143 billion in Q3 2024, marking a 2.8% decline year-over-year. The decrease was primarily due to declines in Commercial Printing and Supplies, compounded by unfavorable foreign currency impacts.
| Metrics | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Revenue | $4.143 billion | $4.263 billion | -2.8% |
| Earnings from Operations | $715 million | $794 million | -9.9% |
| Earnings from Operations (% of Revenue) | 17.3% | 18.6% | -1.3% |
Revenue Breakdown by Business Unit
The revenue from the Printing segment can be broken down further:
| Business Unit | Q3 2024 Revenue | Q3 2023 Revenue | % Change |
|---|---|---|---|
| Supplies | $2.703 billion | $2.768 billion | -1.5% |
| Commercial Printing | $1.147 billion | $1.208 billion | -1.4% |
| Consumer Printing | $293 million | $287 million | 0.1% |
Operating Expenses
In Q3 2024, HP reported total operating expenses of $1.966 billion, an increase from $1.870 billion in Q3 2023. The increase was driven by higher research and development (R&D) investments, which rose to $413 million from $354 million.
| Expense Type | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Research and Development | $413 million | $354 million | 16.7% |
| Selling, General and Administrative | $1.404 billion | $1.302 billion | 7.8% |
| Total Operating Expenses | $1.966 billion | $1.870 billion | 5.1% |
Net Earnings
For Q3 2024, HP reported net earnings of $640 million, down from $766 million in Q3 2023. The net earnings per share for Q3 2024 were $0.65 (diluted), compared to $0.76 in the prior year.
| Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Earnings | $640 million | $766 million |
| Net Earnings Per Share (Diluted) | $0.65 | $0.76 |
Cash Flow and Liquidity
For the nine months ended July 31, 2024, HP reported net cash provided by operating activities of $2.126 billion, compared to $1.596 billion for the same period in 2023. Total debt as of July 31, 2024, was $9.625 billion, up from $9.484 billion as of October 31, 2023.
| Metrics | July 31, 2024 | October 31, 2023 |
|---|---|---|
| Cash and Cash Equivalents | $2.785 billion | $3.107 billion |
| Total Debt | $9.625 billion | $9.484 billion |
| Net Cash from Operating Activities | $2.126 billion | $1.596 billion |
Conclusion on Financial Health
HP's financial performance in 2024 reflects a mixed picture, with growth in Personal Systems offset by declines in Printing. The company continues to invest in R&D and operational efficiency, maintaining a focus on long-term profitability.
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