A month has gone by since the last earnings report for HP (HPQ). Shares have lost about 8.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is HP due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for HP Inc. before we dive into how investors and analysts have reacted as of late.
HPQ's Q2 Earnings Surpass Expectations, Revenues Rise Y/Y
HP reported second-quarter fiscal 2026 earnings of 86 cents per share, which beat the Zacks Consensus Estimate by 19.4%. The company reported earnings of 71 cents per share a year ago. These figures are adjusted for non-recurring items.
HPQ posted revenues of $14.4 billion for the first quarter of fiscal 2026, which increased 9% year over year and surpassed the Zacks Consensus Estimate by 3.5%.This compares with $13.2 billion of revenues reported in the year-ago quarter.
HPQ’s Q2 Results in Detail
Personal Systems (PS) revenues (71% of net revenues) came in at $10.2 billion, up 13% year over year (10% in constant currency).
HP’s total PC units declined 7%, with Consumer PS shipments and Commercial PS shipments down 8% and 7%, respectively. On the revenue side, Consumer PS grew 10%, while Commercial PS rose 14%.
The Printing business (29% of net revenues) generated $4.2 billion, flat year over year (down 2% in constant currency). Consumer Printing revenues fell 10%, Commercial Printing revenues remained flat, and Supplies revenues increased 1% (remained flat in CC). Total hardware units were down 7%, with both Consumer and Commercial units declining 8% and 4%, respectively.
By geography, HP posted revenue growth in all regions. On a constant currency basis, the Americas rose 0.2%, EMEA was up 6.1%, and Asia Pacific & Japan grew 17.9% year over year.
HPQ posted a non-GAAP operating margin of 7.5%, up 20 basis points year over year.
Balance Sheet and Cash Flow
HP ended the fiscal second quarter with $3.7 billion in cash, cash equivalents and restricted cash, up from the previous quarter’s $3.15 billion.
During the quarter, HP generated $926 million of cash from operating activities and delivered $780 billion in free cash flow. During the quarter, the company returned $374 million to shareholders through dividends and share repurchases.
HPQ’s Guidance for Q3 and FY26
For fiscal 2026, HPQ expects its non-GAAP earnings to be in the range of $2.90-$3.10 per share compared with the prior range of $2.90 to $3.20.
For the third quarter of fiscal 2026, HPQ expects non-GAAP earnings in the range of 61-71 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, HP has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a score of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, HP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).