Key Takeaways
- HP delivered fiscal Q2 adjusted earnings per share of $0.86, surpassing Wall Street’s $0.71 projection by 21%
- Total revenue reached $14.4 billion, climbing 9% compared to last year and exceeding the $14 billion consensus
- The Personal Systems division generated $10.2 billion in revenue, representing a 13% year-over-year increase
- HPQ shares rose initially following the earnings release but reversed course, trading down in premarket hours
- The company refined its full-year earnings outlook to $2.90–$3.10, tightening the previous $2.90–$3.20 range
Despite delivering impressive fiscal second-quarter results that exceeded expectations on both revenue and earnings, HP’s shares struggled to maintain momentum. The stock was trading down approximately 1.5% in Thursday’s premarket session, even as the underlying financials showed strength.
For the quarter that concluded on April 30, the technology giant posted adjusted earnings of $0.86 per share, significantly outpacing the Street’s $0.71 consensus. Total quarterly revenue of $14.4 billion similarly exceeded analyst forecasts of $14 billion.
This represents a solid 9% increase in revenue compared to the comparable quarter last year. It’s an impressive achievement for a corporation maneuvering through a challenging cost landscape that has tested many in the sector.
Personal Systems Division Drives Performance
The Personal Systems segment emerged as the clear winner this quarter, generating $10.2 billion in revenue — a 13% year-over-year gain that surpassed the $10 billion analyst consensus. The Commercial PS division grew 14%, while the Consumer PS segment advanced 10%.
Interestingly, shipment volumes painted a contrasting picture. Overall PC unit sales declined 7%, with both Consumer and Commercial segments experiencing roughly 7–8% declines in unit volumes. The combination of lower volumes with higher revenue indicates that pricing strategies have been effective.
The Printing division contributed $4.2 billion in revenue, essentially unchanged from the prior year but modestly above the $4.1 billion estimate. Consumer Printing revenue dropped 10%, Commercial Printing remained flat, and Supplies revenue increased 1%.
Memory Cost Inflation Creates Margin Challenges
Escalating memory component costs continue to present challenges for HP and the wider hardware technology sector. Robust memory demand driven by AI infrastructure expansion has significantly exceeded available supply, resulting in elevated costs and compressed margins throughout the industry.
HP has implemented price increases to counterbalance this pressure. Based on the revenue performance, this approach appears to be yielding results.
Operating margin figures demonstrated the ongoing cost headwinds, with Personal Systems achieving 5.2% and Printing delivering 18.3%.
The company generated $0.8 billion in free cash flow during the quarter, alongside $0.9 billion in operating cash flow. HP distributed $374 million to shareholders via dividends and stock repurchases, which included $274 million in dividend payments at $0.30 per share.
HP concluded the quarter holding $3.7 billion in gross cash.
Interim CEO Bruce Broussard highlighted advancements in AI-enabled PCs, Z workstation systems, and AI-integrated printing solutions as indicators that the company is establishing foundations for sustained future expansion.
CFO Karen Parkhill stated the organization is “executing with discipline in a dynamic environment” and leveraged the momentum from two consecutive strong quarters to refine its annual projections.
Looking ahead to Q3, HP provided guidance for non-GAAP earnings per share of $0.61–$0.71. For the complete fiscal year 2026, the company adjusted its non-GAAP EPS forecast to $2.90–$3.10, narrowing the previously communicated range of $2.90–$3.20. Management also confirmed its free cash flow outlook of $2.8–$3.0 billion for the fiscal year.
During its February update, HP had indicated expectations for performance “closer to the low end” of its guidance range. The current revised outlook suggests growing confidence in the business trajectory.
On a GAAP basis, Q2 earnings per share registered at $0.49, improving from $0.42 in the year-ago period but falling short of the company’s guided range of $0.52–$0.58.
