HP Inc. (NYSE:HPQ) stock fell Wednesday after the company reported first-quarter fiscal 2026 results and issued quarterly profit guidance below estimates.
Earnings Snapshot
The company reported adjusted EPS of 81 cents, which beat the analyst consensus estimate of 77 cents.
Sales rose 6.9% year over year (Y/Y) to $14.4 billion, surpassing the analyst consensus estimate of $13.9 billion.
Adjusted operating margin contracted 40 bps Y/Y to 6.9% in the quarter.
Operating cash flow came in at $383 million and free cash flow at $175 million in the quarter.
HP paid a dividend of 30 cents per share and repurchased shares worth $325 million in the quarter.
The company ended the quarter with cash and cash equivalents of $3.2 billion.
Segment Performance
Revenue in the Personal Systems segment surged 11% Y/Y to $10.3 billion, with Consumer PS revenue growing 16% Y/Y and Commercial PS net revenue rising 9% Y/Y in the quarter.
Total units increased 12% Y/Y, with Consumer PS and Commercial PS units rising 14% Y/Y and 11% Y/Y, respectively.
Meanwhile, the Printing segment revenue fell 2% Y/Y to $4.2 billion as Consumer Printing revenue declined 8% Y/Y, and Commercial Printing net revenue was down 3% Y/Y in the quarter. Total hardware units also fell 6% Y/Y in the quarter.
Outlook
HP reaffirmed its fiscal 2026 adjusted earnings guidance of $2.90 to $3.20 per share, compared with analysts’ consensus estimate of $3.01.
For the second quarter, the company expects adjusted earnings of 70 cents to 76 cents per share, compared with Wall Street’s estimate of 74 cents.
Karen Parkhill, CFO, said, “With just one quarter behind us in a dynamic environment marked by increasing memory costs, we are holding our outlook for the year yet currently anticipate results to be closer to the low end of our range. We are well practiced at managing through headwinds and remain focused on executing our mitigation plans.”
HPQ Price Action: HP shares were down 4.62% at $17.36 during premarket trading on Wednesday. The stock is trading at a new 52-week low, according to Benzinga Pro data.
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