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    HP Inc (HPQ)

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    HP Inc. is a leading global provider of personal computing and other digital access devices, imaging and printing products, and related technologies, solutions, and services. Operating in more than 170 countries, the company is organized into three reportable segments: Personal Systems, Printing, and Corporate Investments . HP Inc. sells a wide range of products including desktops, notebooks, workstations, printers, and related services, catering to both commercial and consumer markets .

    1. Personal Systems - Offers commercial and consumer desktops and notebooks, workstations, thin clients, commercial mobility devices, retail point-of-sale systems, displays, hybrid systems, software, solutions, and services.
      • Commercial PS - Focuses on enterprise and SMB customers.
      • Consumer PS - Targets individual consumers with a focus on gaming and remote work.
    2. Printing - Provides consumer and commercial printer hardware, supplies, solutions, and services, with a focus on office and home printing solutions, graphics solutions, and 3D printing and personalization.
    3. Corporate Investments - Engages in investing in key growth areas such as hybrid systems, gaming, workforce solutions, consumer subscriptions, industrial graphics, and 3D and personalization, which are expected to grow significantly by the 2026 fiscal year.
    NamePositionStart DateShort Bio
    Enrique LoresPresident and CEONovember 2019Enrique Lores has been serving as the President and Chief Executive Officer of HP Inc. since November 2019. He has been with the company for nearly 35 years, holding various leadership positions across the organization .
    Marie MyersChief Financial OfficerFebruary 2021Marie Myers has served as the Chief Financial Officer of HP Inc. since February 2021, after previously serving as acting CFO from October 2020 to February 2021. She was previously CFO of UiPath from December 2018 to December 2019 .
    Tuan TranPresident of Technology and InnovationNovember 1, 2024Tuan Tran was appointed as the President of Technology and Innovation at HP Inc., effective November 1, 2024. He previously served as the President of Imaging, Printing & Solutions since November 2019 .
    Alex ChoPresident, Personal SystemsJune 2018Alex Cho has served as the President of Personal Systems at HP Inc. since June 2018. Prior to this role, he was the Global Head and General Manager of Commercial Personal Systems from 2014 to 2018 .
    Julie JacobsChief Legal Officer and General CounselOctober 2022Julie Jacobs has served as the Chief Legal Officer and General Counsel at HP Inc. since October 2022. Before joining HP, she was the Senior Executive Vice President, General Counsel, and Corporate Secretary of Yahoo .
    Kristen LudgateChief People OfficerJuly 2021Kristen Ludgate has served as the Chief People Officer at HP Inc. since July 2021. Before joining HP, she was the Executive Vice President and Chief Human Resources Officer at 3M .
    David McQuarrieChief Commercial OfficerNovember 2022David McQuarrie has served as the Chief Commercial Officer at HP Inc. since November 2022. Prior to this role, he was the Senior Vice President & General Manager of the Personal Systems Category .
    Anneliese OlsonPresident of Imaging, Printing & SolutionsNovember 1, 2024Anneliese Olson was appointed as the President of Imaging, Printing & Solutions at HP Inc., effective November 1, 2024. She succeeded Tuan Tran in this role .
    1. Given that most of your products are manufactured outside the U.S., and with the potential for new tariffs on imported goods, how specifically do you plan to mitigate risks to your supply chain and margins if such tariffs are imposed?

    2. Despite the aggressive cost optimizations under your Future Ready Transformation Plan, operating income appears to be roughly flat year-over-year; why aren't these cost savings translating into higher operating income or free cash flow growth?

    3. In the Print segment, you mentioned ongoing competitive pressure due to Japanese competitors leveraging the weak yen; how do you plan to sustain margins and gain market share in this challenging pricing environment?

    4. You expect AI PCs to make up approximately 25% of your PC unit shipments in FY '25; what concrete steps are you taking to ensure this transition drives meaningful revenue and margin expansion, especially considering potential ASP benefits?

    5. Given your capital allocation policy maintains a gross leverage ratio under 2x, why not reassess this target in light of improved operating performance and potential growth opportunities, potentially allowing for greater investments or increased shareholder returns?

    Program DetailsProgram 1
    Approval DateAugust 27, 2024
    End Date/DurationNo specific expiration date
    Total additional amount$10.0 billion
    Remaining authorization amount$9.3 billion
    DetailsIncreased total share repurchase authorization to $10.0 billion, inclusive of the amount remaining under previously authorized share repurchases.
    YearAmount Due (in millions)Debt TypeInterest Rate% of Total Debt
    2025$1,419 Principal payments on short-term debt 5.0% 14.7% = (1,419 / 9,669) * 100
    2025$1,150 U.S. Dollar Global Notes 2.20% 11.9% = (1,150 / 9,669) * 100
    2026$720 U.S. Dollar Global Notes 1.45% 7.4% = (720 / 9,669) * 100
    2027$1,133 U.S. Dollar Global Notes 3.00% 11.7% = (1,133 / 9,669) * 100
    2028$972 U.S. Dollar Global Notes 4.75% 10.1% = (972 / 9,669) * 100
    2029$1,023 U.S. Dollar Global Notes 4.00% 10.6% = (1,023 / 9,669) * 100
    2030$850 U.S. Dollar Global Notes 3.40% 8.8% = (850 / 9,669) * 100
    2031$1,000 U.S. Dollar Global Notes 2.65% 10.3% = (1,000 / 9,669) * 100
    2032$1,000 U.S. Dollar Global Notes 4.20% 10.3% = (1,000 / 9,669) * 100
    2033$1,100 U.S. Dollar Global Notes 5.50% 11.4% = (1,100 / 9,669) * 100
    2041$1,200 U.S. Dollar Global Notes 6.00% 12.4% = (1,200 / 9,669) * 100

    Competitors mentioned in the company's latest 10K filing.

    • Lenovo Group Limited - Competitor in the Personal Systems segment .
    • Dell Inc. - Competitor in the Personal Systems segment .
    • Huawei Technologies Co., Ltd. - Competitor in the Personal Systems segment .
    • Acer Inc. - Competitor in the Personal Systems segment .
    • ASUSTeK Computer Inc. - Competitor in the Personal Systems segment .
    • Apple Inc. - Competitor in the Personal Systems segment .
    • Toshiba Corporation - Competitor in the Personal Systems segment .
    • Microsoft Corporation - Competitor in the Personal Systems segment .
    • Samsung Electronics Co., Ltd - Competitor in the Personal Systems segment .
    • Logitech International S.A. - Competitor in the Personal Systems segment .
    • Canon Inc. - Competitor in the Printing segment .
    • Lexmark International, Inc. - Competitor in the Printing segment .
    • Xerox Corporation Ltd. - Competitor in the Printing segment .
    • Seiko Epson Corporation - Competitor in the Printing segment .
    • The Ricoh Company Ltd. - Competitor in the Printing segment .
    • Brother Industries, Ltd. - Competitor in the Printing segment .
    CustomerRelationshipSegmentDetails
    TD Synnex Corp
    Third-party distributor/reseller
    All
    Accounts receivable was 9.7% of gross A/R as of Oct 31, 2024, down from 13.2% in 2023.
    NameStart DateEnd DateReason for Change
    Ernst & Young LLP2000 PresentCurrent auditor

    Recent developments and announcements about HPQ.

    Financial Reporting

      Earnings Call

      ·
      Nov 27, 2024, 9:47 AM

      HPQ recently released its Q4 2024 earnings call transcript, highlighting several key points:

      1. Revenue and Profit Performance: HPQ reported a 2% year-over-year increase in revenue for the second consecutive quarter, with growth in both Personal Systems and Print segments. The company achieved a non-GAAP EPS of $0.93, marking a 3% increase year-over-year .

      2. Management’s Forward Guidance: Looking ahead to fiscal year 2025, HPQ expects the PC market to grow mid-single digits, with commercial segments growing faster than consumer ones. The company anticipates AI PCs to constitute about 25% of PC unit shipments in FY '25, which is expected to drive average selling prices higher . HPQ also plans to maintain its focus on profitable growth in premium consumer and gaming segments .

      3. Market Conditions and Strategic Initiatives: HPQ is optimistic about the opportunities in AI and the future of work, leveraging its portfolio to capture growth in commercial and solutions segments. The company is investing in AI-powered capabilities and software to enhance customer experiences and drive productivity .

      4. Analyst Questions and Management Responses: Analysts inquired about the impact of AI PCs on average selling prices and margins, to which HPQ responded that AI PCs are expected to improve ASPs and contribute positively to margins. The company also addressed questions about the competitive landscape in print and the potential impact of tariffs on its supply chain, indicating readiness to adapt to changes .

      Overall, HPQ is focused on strategic growth areas, particularly in AI and commercial segments, while managing costs and maintaining profitability in a competitive market environment.

      Earnings Report

      ·
      Nov 26, 2024, 10:03 PM

      HP Inc. Releases Fiscal 2024 Earnings Results

      On November 26, 2024, HP Inc. announced its fiscal 2024 full-year and fourth-quarter financial results. Here are the key highlights:

      • Fiscal 2024 Full Year Results:

        • GAAP Diluted Net EPS: $2.81, which is above the previously provided outlook of $2.62 to $2.72 per share.
        • Non-GAAP Diluted Net EPS: $3.38, within the previously provided outlook of $3.35 to $3.45 per share.
        • Net Revenue: $53.6 billion, a slight decrease of 0.3% from the prior-year period.
        • Net Cash Provided by Operating Activities: $3.7 billion, with a free cash flow of $3.3 billion.
        • Shareholder Returns: $3.2 billion returned to shareholders through share repurchases and dividends.
      • Fourth Quarter Results:

        • GAAP Diluted Net EPS: $0.93, above the previously provided outlook of $0.74 to $0.84 per share.
        • Non-GAAP Diluted Net EPS: $0.93, within the previously provided outlook of $0.89 to $0.99 per share.
        • Net Revenue: $14.1 billion, an increase of 1.7% from the prior-year period.
        • Net Cash Provided by Operating Activities: $1.6 billion, with a free cash flow of $1.5 billion.
        • Dividend Increase: HP announced a 5% increase in its quarterly cash dividend, resulting in a dividend of $0.2894 per share starting in the first fiscal quarter of 2025.
      • Segment Performance:

        • Personal Systems: Net revenue was $9.6 billion, up 2% year over year, with a 5.7% operating margin.
        • Printing: Net revenue was $4.5 billion, up 1% year over year, with a 19.6% operating margin.

      These results reflect HP's steady progress in its Personal Systems and Print segments, positioning the company well for future growth opportunities .

    Financial Actions

      Dividend Policy

      ·
      Nov 26, 2024, 10:02 PM

      HP Inc. Announces Dividend Increase

      HP Inc. has announced a 5% increase in its planned quarterly cash dividend. This change will commence with the dividend for the first fiscal quarter of fiscal year 2025, resulting in a quarterly dividend of $0.2894 per share. This decision was authorized by HP's Board of Directors and reflects the company's confidence in its financial position and future prospects. The dividend is payable on January 2, 2025, to stockholders of record as of the close of business on December 11, 2024 .