HP Inc.

🇺🇸New York Stock Exchange
Back to all articles
HP Inc. stock analysis HPQ overview
Bullish +75

HP Inc. (HPQ) Tops Revenue and Profit Estimates

📈 HP Inc. reported second-quarter revenue of $14.41 billion, representing a 9% increase year-over-year.

💰 Adjusted earnings per share came in at 86 cents, surpassing the analyst estimate of 71 cents.

🤖 Demand for artificial intelligence advanced PCs was the primary driver behind the strong quarterly results.

📊 AI PC shipments accounted for 44% of total shipments, up from over 35% in the previous quarter.

💸 CFO Karen Parkhill stated the company took deliberate actions to lower memory costs through product reconfiguration and sourcing changes.

🎯 HP Inc. guided third-quarter adjusted EPS to a range of 61-71 cents, with the midpoint slightly above consensus estimates.

📅 The company projects fiscal 2026 EPS to be between $2.90 and $3.10.

⚠️ Management expects operating margins to bottom out in the fourth quarter due to memory chip scarcity pressures.

🔄 Fiscal 2027 is expected to show improvement as Windows 11 shifts focus toward premium PCs following the end of Windows 10 support.

📈 AI PC shipments are projected to rise to 60-70% next year and exceed 70% by fiscal 2028.

💼 HP Inc. operates through three main segments: Personal Systems, Printing, and Corporate Investments.

Bullish Signals
  • HP Inc. (HPQ) reported second-quarter revenue growth of 9% to $14.41 billion, significantly beating LSEG estimates of $14.07 billion.
  • The company delivered adjusted EPS of 86 cents, surpassing analyst expectations of 71 cents driven by strong demand for AI advanced PCs.
  • AI PC shipments accounted for 44% of total shipments in the quarter, a notable increase from over 35% in the prior quarter.
  • Management guided third-quarter adjusted EPS to 61-71 cents with a midpoint slightly above consensus estimates of 64 cents.
  • The company projects fiscal 2026 EPS between $2.90 and $3.10, indicating sustained profitability growth.
  • HP Inc. expects operating margins to bottom out in the fourth quarter as memory chip scarcity pressures ease.
  • Future outlook includes improvement in fiscal 2027 driven by a Windows 11 shift toward premium PCs following the end of Windows 10 support in October.
  • AI PC shipments are projected to rise toward 60-70% next year and exceed 70% by fiscal 2028.
Risk Factors
  • Operating margins are expected to bottom out in the fourth quarter due to memory chip scarcity pressures.
  • The company anticipates fiscal 2027 improvement is contingent on a Windows 11 shift toward premium PCs following the end of Windows 10 support in October.
Full Analysis
HP Inc. (NYSE: HPQ) reported second-quarter revenue growth of 9% to $14.41 billion and adjusted earnings per share of 86 cents, surpassing LSEG estimates of $14.07 billion and 71 cents respectively. The company attributed these results to strong demand for artificial intelligence advanced PCs, which accounted for 44% of shipments, an increase from over 35% in the prior quarter. CFO Karen Parkhill noted that the firm took deliberate actions to lower memory costs through product reconfiguration, sourcing changes, and pricing adjustments. Looking ahead, HP Inc. guided third-quarter adjusted EPS to a range of 61-71 cents, with the midpoint slightly above consensus estimates of 64 cents. The company projects fiscal 2026 EPS between $2.90 and $3.10 and expects operating margins to bottom out in the fourth quarter due to memory chip scarcity pressures. HP Inc. also anticipates improvement in fiscal 2027 as Windows 11 shifts toward premium PCs following the end of Windows 10 support in October. Additionally, AI PC shipments are expected to rise toward 60-70% next year and exceed 70% by fiscal 2028.