Key Takeaways:
HP reported fiscal third-quarter revenue of $15.7 billion, up 12.5% year over year, beating the $14.38 billion consensus.
"In the third quarter we increased both total sales and share in premium products and continued to attract new customers with innovations in WXP, Print, workstations and AI PCs," Bruce Broussard, interim CEO at HP, said.
Adjusted EPS of 83 cents topped the 69-cent estimate, helped by an 11-cent boost from tariff refunds. GAAP EPS was 71 cents, down from 80 cents a year earlier. Personal Systems revenue rose 18 percent to $11.77 billion, while Printing slipped 2 percent to $3.91 billion. Free cash flow reached $1.57 billion, up 7 percent from a year earlier.
HP guided fourth-quarter adjusted EPS of 69 to 79 cents, above the 67-cent consensus, and raised its full-year forecast to $3.19 to $3.29 from $2.90 to $3.10. Shares fell 10 percent in extended trading, as the fourth-quarter midpoint of 74 cents trails the 83 cents earned in Q3.
The guidance includes an 8-cent favorable impact from estimated tariff refunds in the fourth quarter and 19 cents for the full year. The Trump administration has refunded about $100 billion in tariffs collected before the Supreme Court struck down those duties, a court filing showed this month.
HP, like peers Dell Technologies, Apple and China's Lenovo Group, raised prices for its devices as a global shortage of memory chips drove up costs. Lenovo reported a 43 percent jump in quarterly revenue earlier this month, benefiting from an AI hardware boom and price hikes.
"We delivered another strong quarter, with record third quarter revenue, EPS above the top of our guidance range, and are raising our guidance for FY26," Karen Parkhill, CFO at HP, said.
Personal Systems operating margin narrowed to 4.6 percent from 5.4 percent a year earlier, while Printing expanded to 18.1 percent from 17.0 percent. The company generated $1.74 billion in operating cash flow and returned $574 million to shareholders through dividends and buybacks in the quarter. HP exited the period with $4.2 billion in gross cash.
The results show HP's ability to offset memory chip costs through price increases and tariff refunds, but the sequential decline in adjusted profit points to a cost environment that remains a drag. Investors will watch the fiscal 2026 fourth-quarter earnings call for updated segment margins as memory supply constraints ease.
This article is for informational purposes only and does not constitute investment advice.
