News highlights:
- Estimates GAAP diluted net earnings per share (“EPS”) for fiscal 2024 of $2.75 to $3.15
- Estimates non-GAAP diluted net EPS for fiscal 2024 of $3.25 to $3.65
- Estimates fiscal 2024 free cash flow of $3.1 to $3.6 billion
- Expects to return approximately 100% of fiscal 2024 free cash flow to shareholders through dividends and share repurchases
- Announces dividend increase of 5%
- Estimates $200 million increase in Future Ready plan annualized gross run rate structural cost savings, to $1.6 billion by the end of fiscal 2025.
PALO ALTO, Calif., Oct. 10, 2023 (GLOBE NEWSWIRE) -- HP Inc. (NYSE: HPQ) Today at HP’s 2023 Securities Analyst Meeting (“SAM”), the company provided details on its strategy and opportunities for long-term growth, along with its financial outlook for fiscal 2024.
“HP is very well positioned to deliver long-term sustainable growth,” said Enrique Lores, President and Chief Executive Officer, HP Inc. “Our Future Ready plan is strengthening our core business, accelerating our expansion in services, building new operational capabilities, and improving our structural costs. Most importantly, we are innovating to meet the changing needs of our customers and we see attractive opportunities to drive profitable growth across our business.”
Fiscal 2024 outlook
For fiscal 2024, the company estimates GAAP diluted net EPS to be in the range of $2.75 to $3.15 and estimates non-GAAP diluted net EPS to be in the range of $3.25 to $3.65. Fiscal 2024 non-GAAP diluted net EPS estimates exclude $0.50 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related (credits)/charges, tax adjustments and the related tax impact on these items. The company also expects a $200 million increase in its Future Ready plan annualized gross run rate structural cost savings, to $1.6 billion by the end of fiscal 2025, with no change to estimated restructuring and other charges of approximately $1.0 billion.
Based on the current environment, HP anticipates generating free cash flow of $3.1 to $3.6 billion for fiscal 2024.
For fiscal 2024, the company indicated that it expects to return approximately 100% of free cash flow through dividends and share repurchases. The HP Board of Directors has approved an increase to the planned annual dividend amount to $1.1024 per share, reflecting a 5% increase from the prior dividend. The balance is expected to be returned to shareholders through share repurchases.
“Our financial outlook reflects continued progress against our strategic priorities,” said Marie Myers, Chief Financial Officer, HP Inc. “We’re accelerating our three-year annualized gross structural cost savings target, and we’re confident in our plans to grow non-GAAP diluted net EPS and free cash flow in FY24 and beyond. Our disciplined financial plan and capital allocation strategy is designed to maximize growth and value creation.”
Webcast details
A webcast of today’s event, along with management presentations and other materials, is available at
https://investor.hp.com/events/event-details/2023/HP-Securities-Analyst-Meeting/default.aspx. This news release contains only a summary of some of the information being presented at today’s event and should be read in conjunction with the management presentations and other materials made available on that website.
About HP Inc.
HP Inc. (NYSE: HPQ) is a global technology leader and creator of solutions that enable people to bring their ideas to life and connect to the things that matter most. Operating in more than 170 countries, HP delivers a wide range of innovative and sustainable devices, services and subscriptions for personal computing, printing, 3D printing, hybrid work, gaming, and more. For more information, please visit
http://www.hp.com.
HP Inc. Media Relations
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HP Inc. Investor Relations
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Forward-looking statements
This document contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, they could affect the business and results of operations of HP Inc. and its consolidated subsidiaries which may differ materially from those expressed or implied by such forward-looking statements and assumptions.
All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, any statements regarding the impact of the COVID-19 pandemic; projections of net revenue, margins, expenses, effective tax rates, net earnings, net earnings per share, cash flows, benefit plan funding, deferred taxes, share repurchases, foreign currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring and other charges, planned structural cost reductions and productivity initiatives; any statements of the plans, strategies and objectives of management for future operations, including, but not limited to, our business model and transformation, our sustainability goals, our go-to-market strategy, the execution of restructuring plans and any resulting cost savings (including the fiscal 2023 plan), net revenue or profitability improvements or other financial impacts; any statements concerning the expected development, demand, performance, market share or competitive performance relating to products or services; any statements concerning potential supply constraints, component shortages, manufacturing disruptions or logistics challenges; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims, disputes or other litigation matters; any statements of expectation or belief as to the timing and expected benefits of acquisitions and other business combination and investment transactions (including the recent acquisition of Plantronics, Inc. (“Poly”)); and any statements of assumptions underlying any of the foregoing. Forward-looking statements can also generally be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will,” “would,” “could,” “can,” “may,” and similar terms.
Risks, uncertainties and assumptions that could affect our business and results of operations include factors relating to the impact of macroeconomic and geopolitical trends, changes and events, including the Russian invasion of Ukraine and tension across the Taiwan Strait and the regional and global ramifications of these events; recent volatility in global capital markets, increases in benchmark interest rates, the effects of inflation and instability of financial institutions; risks associated with HP’s international operations; the effects of the COVID-19 pandemic; the execution and performance of contracts by HP and its suppliers, customers, clients and partners, including logistical challenges with respect to such execution and performance; changes in estimates and assumptions HP makes in connection with the preparation of its financial statements; the need to manage (and reliance on) third-party suppliers, including with respect to component shortages, and the need to manage HP’s global, multi-tier distribution network, limit potential misuse of pricing programs by HP’s channel partners, adapt to new or changing marketplaces and effectively deliver HP’s services; HP’s ability to execute on its strategic plans, including the previously announced initiatives, business model changes and transformation; execution of planned structural cost reductions and productivity initiatives; HP’s ability to complete any contemplated share repurchases, other capital return programs or other strategic transactions; the competitive pressures faced by HP’s businesses; risks associated with executing HP’s strategy and business model changes and transformation; successfully innovating, developing and executing HP’s go-to-market strategy, including online, omnichannel and contractual sales, in an evolving distribution, reseller and customer landscape; the development and transition of new products and services and the enhancement of existing products and services to meet evolving customer needs and respond to emerging technological trends; successfully competing and maintaining the value proposition of HP’s products, including supplies; challenges to HP’s ability to accurately forecast inventories, demand and pricing, which may be due to HP’s multi-tiered channel, sales of HP’s products to unauthorized resellers or unauthorized resale of HP’s products or our uneven sales cycle; integration and other risks associated with business combination and investment transactions; the results of our restructuring plans (including the fiscal 2023 plan), including estimates and assumptions related to the cost (including any possible disruption of HP’s business) and the anticipated benefits of our restructuring plans; the protection of HP’s intellectual property assets, including intellectual property licensed from third parties; the hiring and retention of key employees; disruptions in operations from system security risks, data protection breaches, cyberattacks, extreme weather conditions or other effects of climate change, medical epidemics or pandemics such as the COVID-19 pandemic, and other natural or manmade disasters or catastrophic events; the impact of changes to federal, state, local and foreign laws and regulations, including environmental regulations and tax laws; our aspirations related to environmental, social and governance matters; potential impacts, liabilities and costs from pending or potential investigations, claims and disputes; the effectiveness of our internal control over financial reporting and other risks that are described in HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2022 and HP’s other filings with the Securities and Exchange Commission.
