HP Reports Q4 Results, To Cut Up To 6,000 Jobs To Lower Costs
HP Inc. (HPQ), the PC and printer business of the former Hewlett-Packard Co., on Tuesday reported results for the fourth quarter, with company posting a small loss for the quarter. Moving ahead, the company announced plans to lay off up to 6,000 employees in order to cut costs.
HP reported a fourth-quarter loss of 2 million, compared with net income of $3.10 billion. Adjusted earnings were $0.85 per share, compared with $0.94 per share in the year-ago quarter.
Revenue for the quarter slipped 11.2% to $14.80 billion from $16.68 billion a year ago.
“We had a solid end to our fiscal year despite navigating a volatile macro-environment and softening demand in the second half. In Q4 we delivered on our non-GAAP EPS target, while also completing our three-year value creation plan and exceeding our key metrics,” said Enrique Lores, HP President and CEO.
Personal Systems revenue was $10.3 billion, down 13% year over year. Total units were down 21% with Notebooks units down 26% and Desktops units up 3%. Printing revenue was $4.5billion, down 7% year over year. Total hardware units were down 3% with Consumer units down 4% and Commercial units up 5%.
Looking forward to the first quarter, the company expects adjusted earnings of $0.70 to $0.80 per share. For the fiscal year 2023, HP now expects adjusted earnings of $3.20 to $3.60 per share.
Further, HP board declared a quarterly cash dividend of $0.2625 per share on the company’s common stock, payable on January 4, 2023. This is an increase of 5% from the prior dividend.
HP also announced a fiscal year 2023 Future Ready Transformation plan, driving significant structural cost savings through digital transformation, portfolio optimization and operational efficiency. The company estimates that these actions will result in annualized gross run rate savings of at least $1.4 billion by the end of fiscal 2025.
However, the company estimates to incur about $1.0 billion in labor and non-labor costs related to restructuring and other charges, with approximately $0.6 billion in fiscal 2023, and the rest split about equally between fiscal 2024 and 2025.
The company expects to reduce gross global headcount by approximately 4,000-6,000 employees. These actions are expected to be completed by the end of fiscal 2025.
HPQ closed Tuesday’s trading at $29.38, up $0.22 or 0.75%, on the NYSE. The stock, however, slipped $0.08 or 0.27%, in the after-hours trading.
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