HP Inc. announced its financial results for the second quarter of fiscal year 2025, showing modest revenue growth, although with a notable decline in its net income and cash generation. With total revenues of 13.2 billion dollars, the technology company reported a 3.3% increase compared with the same period of the previous year. This growth was driven mainly by its Personal Systems division for enterprises.
Net income, in accordance with GAAP accounting principles, declined 33% to $406 million, while diluted earnings per share fell 31% versus the second quarter of 2024, standing at $0.42. In non-GAAP terms, earnings per share was $0.71, a figure that fell short of the company's more conservative forecasts.
The president and chief executive officer of HP, Enrique Lores, highlighted the solid growth in revenues, attributing it to the momentum of the personal computer business and to the future of work strategy. Nevertheless, he acknowledged the challenges of a 'dynamic regulatory environment' and stressed that HP is implementing measures to reduce costs and increase its productive capacity.
The chief financial officer, Karen Parkhill, noted an uncertain macroeconomic outlook and explained that the company has adjusted its forecasts to adapt to moderate demand and to the net costs of international trade. Parkhill expressed confidence that these costs could be offset in the fourth quarter of the fiscal year.
The quarter's free cash flow was negative, with a net outflow of $95 million, down from the $500 million positive in the prior year. Cash flow from operations also declined to $38 million, reflecting lower operating performance and greater investments in assets.
Regarding its divisions, the Personal Systems segment stood out with revenues of $9.0 billion, a 7% year-over-year increase. This growth was led by a 9% increase in commercial solutions. However, the printing area experienced a 4% drop, with revenues of 4,200 million dollars.
HP allocated $273 million to dividends and repurchased shares for $100 million, returning a total of $400 million to its shareholders. At the end of the quarter, the company had a gross cash position of $2.7 billion.
Looking ahead, HP expects GAAP earnings per share between $0.57 and $0.69 for the third fiscal quarter, projecting annual free cash flow of between $2.6 billion and $3.0 billion. However, these objectives are conditioned by the current macroeconomic and regulatory pressures, which the company continues to monitor closely.
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