Information technology company HP Inc. (HPQ) has reported mixed results for the third quarter ended July 31, 2021. Following the earnings release, shares of the company declined 1.6% to close at $28.65 in extended trade on Thursday.
Net revenues for the quarter jumped 7% year-over-year from $14.3 billion to $15.3 billion. The figure failed to surpass the Street’s estimates of $15.91 billion.
Net revenues from Personal Systems stood at $10.4 billion and accounted for about 68% of the total net revenues. Further, net revenues from Printing grew 24% from the prior-year period to $4.9 billion.
The company reported earnings of $1 per share at the end of the quarter, which denotes a significant growth from the previous year’s figure of $0.49 per share, outpacing analysts’ estimates of $0.84 per share.
In other key operating metrics, HP’s net cash provided by operating activities in the quarter stood at $1.1 billion, while it generated free cash flow of $1 billion. Share repurchases and dividends for the quarter amounted to $1.7 billion.
Notably, the company also provided guidance for the fourth quarter and Fiscal Year 2021.
For the third quarter, the company anticipates EPS to be in the range of $0.84 to $0.90 against the consensus estimate of $0.81. Similarly, for the full Fiscal Year 2021, the company expects EPS to hover between $3.69 and $3.75.
The CEO of HP, Enrique Lores, said, “Strong and sustained demand for our technology drove another quarter of top and bottom-line growth and we more than doubled non-GAAP EPS year over year. We are performing while we are transforming our business models and service offerings to accelerate growth opportunities across our portfolio.” (See HP stock chart on TipRanks)
Recently, Evercore ISI analyst Amit Daryanani reiterated a Buy rating on the stock with a price target of $34. The analyst’s price target implies upside potential of 16.8% from current levels.
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 3 Buys and 3 Holds. The average HP price target of $34 implies that the stock has upside potential of 16.8% from current levels.
HP scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained about 55.6% over the past year.
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