HP Inc. Reports Declining EPS Despite Revenue Growth

HP Inc. faces mixed earnings as EPS drops to $0.42, down from $0.61 last year, although revenue increased 3.3% to $13.220 billion. Investors should weigh the positive revenue growth against declining EPS in their decisions.

Date: 29-05-2025

AI Rating: 5

Summary of Earnings Performance
HP Inc.'s earnings report indicates a decline in both net income and earnings per share (EPS). The reported net income for the second quarter was $406 million, down from $607 million in the same quarter last year. The earnings per share (EPS) similarly fell to $0.42 from $0.61, which is a significant drop and thus raises concerns about the company's profitability trajectory.

In contrast, the company did report a revenue growth of 3.3%, with total revenue reaching $13.220 billion compared to $12.800 billion last year. This positive performance in revenue suggests that the demand for HP's products might still be strong, allowing them to sustain some level of sales increase despite lower profitability metrics. Investors need to focus on whether revenue growth can offset the declining earnings.

HP's adjusted earnings have shown a more favorable performance, reporting $678 million or $0.71 per share when excluding certain items. This presents the company in a better light, indicating that while GAAP earnings are down, the company's operational profitability, as viewed through adjusted earnings, is somewhat stronger.

Future Guidance
The guidance for the upcoming quarters is projected based on the lower EPS figures, with forecasts indicating a range between $0.68 to $0.80 for the next quarter and full-year EPS guidance of $3.00 to $3.30. It will be critical for HP to execute on this guidance; if they fail to meet these expected earnings, investor sentiment may further sour.

Overall, while there is a mixed bag of results from HP Inc., the realities of declining EPS compared to prior years coupled with a modest revenue increase signify caution for investors in the near term. Careful monitoring of the next earnings report will be essential to gauge the company's ability to pivot back to a trajectory of satisfying earnings growth.

Stocks: HPQ