HP beats on earnings and revenue but PC unit slump sinks the stock

HP Inc. reported better-than-expected earnings and revenue in the third quarter, but faced a decline in its personal computer unit which weighed on its stock price. The company's adjusted earnings per share came in at 83 cents, up from 75 cents a year earlier, while revenue increased to $15.68 billion, a 12.5% year-over-year growth.

Analysts had predicted 69 cents per share on $14.58 billion in revenue. Personal Systems shipments dropped by 16%, with consumer units falling 19% and commercial units down 14%. Revenue in the segment rose 18% to $11.8 billion, driven by higher selling prices and a 4.6% operating margin. Printing revenue fell 2% to $3.9 billion and supplies revenue was down 3%, while hardware units declined by 7%.

HP refreshed its collaboration hardware, introducing new products like the Poly Studio Room Compute, Poly Focus 6 headset line, and programmable Collaboration Keyboard. The company raised its full-year adjusted earnings forecast to $3.19 to $3.29 per share, up from the $2.90 to $3.10 range in May, with about 19 cents of the figure attributed to estimated tariff refunds.

Free cash flow guidance for the year also increased to $3 billion to $3.2 billion. HP returned $600 million to shareholders through a dividend and share repurchase program. Despite the PC unit slump, HP's Chief Financial Officer Karen Parkhill described the third quarter as a record with earnings "above the top of our guidance range."