By Overview
HPInc. provided its long-term revenue growth forecast at a meeting with securities analysts in Palo Alto, Calif. The company expects annual revenue growth of 2% to 4%, with high single-digit percentage growth in earnings per share. HP (ticker: HPQ) shares increased by 2.4% to $27.05 following the announcement.
Strong Financial Outlook
HP anticipates that its free cash flow growth will align with profit expansion. The company remains committed to returning 100% of its free cash to shareholders through dividends and stock repurchases. In line with this commitment, HP announced a 5-cent increase in its annualized dividend rate, bringing it to $1.10 per share, resulting in a yield of just over 4%.
Fiscal Year 2024 Projections
For the fiscal year ending in October 2024, HP anticipates non-GAAP profits ranging from $3.25 to $3.65 per share. Under generally accepted accounting principles, the projected profits range from $2.75 to $3.15 per share. These figures are slightly below the market consensus of $3.48 per share but show growth compared to the estimated $3.30 per share for fiscal year 2023.
Optimistic Outlook for Free Cash Flow
HP expects its free cash flow for fiscal year 2024 to be between $3.1 billion and $3.6 billion. CFO Marie Myers expressed confidence in an improved personal computer demand, which is expected to drive higher revenue growth in the second half of the year.
Cost Containment Plan
In addition to its positive financial outlook, HP announced that it aims to achieve $1.6 billion in annualized run rate cost savings by the end of fiscal year 2025. This target surpasses the previously announced goal by $200 million.
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