Quick Summary
- HP delivered Q2 adjusted earnings per share of $0.86, crushing Wall Street’s $0.71 consensus by 21%
- Quarterly revenue reached $14.4 billion, climbing 9% from last year and exceeding the $14 billion projection
- The Personal Systems division generated $10.2 billion in revenue, surging 13% year over year
- Despite the strong showing, HPQ shares reversed early gains and traded lower in premarket action
- The company tightened its full-year earnings outlook to $2.90–$3.10 per share, down from the previous $2.90–$3.20 range
HP delivered impressive results for its fiscal second quarter, surpassing expectations on both revenue and earnings. Yet the market response was less than enthusiastic, with HPQ shares declining 1.5% in premarket activity Thursday despite the solid performance.
For the quarter ending April 30, the technology giant posted adjusted earnings of $0.86 per share, significantly outperforming the Street’s $0.71 projection. Quarterly sales of $14.4 billion similarly exceeded analyst forecasts of $14 billion.
The revenue figure represents a solid 9% increase compared to the prior-year quarter. It’s an encouraging performance for a business managing through one of the most challenging cost landscapes in years.
Strong Performance from Personal Systems Division
The Personal Systems segment emerged as the clear winner, generating $10.2 billion in sales — a 13% year-over-year increase that surpassed the $10 billion analyst projection. The Commercial PS segment climbed 14%, while Consumer PS advanced 10%.
However, the unit shipment data painted a contrasting picture. Overall PC unit sales declined 7%, with both the Consumer and Commercial segments experiencing roughly 7–8% drops. The combination of higher revenue despite lower volume suggests the company successfully implemented price increases.
The Printing division contributed $4.2 billion in revenue, essentially unchanged from the previous year but slightly beating the $4.1 billion forecast. Consumer Printing sales dropped 10%, Commercial Printing remained stable, and Supplies revenue ticked up 1%.
Elevated Memory Costs Continue Weighing on Margins
Escalating memory component costs have created ongoing challenges for HP and its hardware industry peers. Strong demand for memory linked to AI infrastructure expansion has significantly outstripped available supply, driving up costs and compressing margins throughout the sector.
HP has attempted to mitigate this pressure through strategic price increases. Based on the revenue performance, this approach appears to be delivering results.
Operating margins highlighted the continued headwinds, with Personal Systems achieving 5.2% and Printing reaching 18.3%.
The company generated $0.8 billion in free cash flow during the quarter, with operating cash flow totaling $0.9 billion. HP distributed $374 million to shareholders through stock repurchases and dividends, including $274 million in dividend payments of $0.30 per share.
The quarter concluded with gross cash holdings of $3.7 billion.
Interim CEO Bruce Broussard highlighted advancements in AI-enabled PCs, Z workstations, and AI-integrated printing solutions as indicators that the company is positioning itself for sustained future expansion.
CFO Karen Parkhill emphasized that the organization is “executing with discipline in a dynamic environment” and leveraged two consecutive strong quarters to refine its annual projections.
Looking ahead to Q3, HP provided non-GAAP earnings guidance of $0.61–$0.71 per share. For fiscal 2026, the company revised its non-GAAP EPS forecast to $2.90–$3.10, narrowing from the earlier $2.90–$3.20 projection. The company maintained its free cash flow outlook of $2.8–$3.0 billion for the year.
In February, HP had indicated expectations for results to track “closer to the low end” of guidance. The revised outlook signals improved confidence in performance.
On a GAAP basis, Q2 earnings reached $0.49 per share, improving from $0.42 in the year-ago period but falling short of the company’s guided range of $0.52–$0.58.
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