SUMMARY
- HP's Q3 revenue falls short of analysts' expectations at $13.2 billion.
- Print segment's longevity concerns analysts from Bernstein and Credit Suisse.
- Deutsche Bank sees resilience in HP’s margins, optimistic about share buybacks.
Shares of HP took a bit of a nosedive this Wednesday morning, dipping by more than 8% after the tech giant unveiled its third-quarter fiscal earnings. And guess what? Wall Street wasn’t too thrilled.
The figures showcased a revenue of $13.2 billion, slightly trailing behind analysts' projection of $13.37 billion. As for the earnings per share? They were bang on the money with 86 cents, after you toss out some of those pesky extra items. But here's a kicker: HP's optimistic forecast about PC pricing didn't quite live up to the mark.
The folks at Bernstein, despite branding the quarter as "disappointing", were hopeful about PCs and hinted at better days. However, when it came to HP's printing realm, they weren’t painting a rosy picture. In their words, a potential slowdown in printer shipments might just throw a wrench in the future growth of supplies. Moreover, even though HPQ’s profit margins soar above the pre-pandemic era, the health and growth potential of the print business has raised eyebrows.
Credit Suisse analysts chimed in with their own concerns. Their verdict? The print segment of HP remains a sticky wicket. The talk of “long-term frailties” and potential cut-throat pricing has got them rethinking. So much so that they've gone ahead and trimmed down their future earnings estimates for the tech behemoth.
Deutsche Bank wasn’t left out of the mix. Their analysts took a scalpel to their HP outlook, trimming their price target from a robust $32 to a slightly subdued $30. Their rationale? HP's results met expectations, but they noticed a ripple effect from a slow-paced recovery in China and a rather bleak forecast for the print division.
But it wasn’t all gloom and doom. Deutsche Bank did find a silver lining in the clouds. They acknowledged that in the face of adversity, HP has showcased resilience by maintaining commendable operating margins. And to sprinkle some more good news? HP has plans up its sleeve to kickstart share buybacks in the near future.
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