HP today released the fourth quarter and full-year financial report for the 2021 fiscal year. The report shows that HP’s fourth-quarter net revenue was 16.675 billion U.S. dollars, an increase of 9.3% compared to 15.258 billion U.S. dollars in the same period last year; net profit was 3.099 billion U.S. dollars, an increase of 364% compared with 668 million U.S. dollars in the same period last year no The adjusted net profit in accordance with the US GAAP was US$1.1 billion, an increase of 29% compared with the US$800 million in the same period last year.
HP's fourth-quarter and full-year results exceeded Wall Street analysts' previous expectations, and the outlook for earnings in the first quarter of the fiscal year 2022 also exceeded expectations, driving its after-hours stock price to rise by nearly 12%.
Summary of the fourth-quarter results
In the fiscal quarter ending October 31, 2021, HP's net profit was US$3.099 billion, an increase of 364% compared to US$668 million in the same period last year. Hewlett-Packard's fourth-quarter diluted earnings per share were US$2.71, an increase of 453% compared to US$0.49 in the same period last year. Excluding one-time items (not in accordance with US GAAP), HP’s adjusted net profit for the fourth quarter was US$1.1 billion, an increase of 29% compared to US$800 million in the same period last year; adjusted earnings per share were US$0.94, An increase of 52% compared to 0.62 US dollars in the same period last year, this performance exceeded analysts' previous expectations. According to data provided by the Yahoo Finance Channel, 15 analysts had previously expected HP’s fourth-quarter earnings per share to reach US$0.88.
Hewlett-Packard’s fourth-quarter net profit and earnings per share (not in accordance with the US GAAP) after-tax adjustments of US$1.883 billion and US$1.54 per share were removed, respectively. This adjustment is related to restructuring and other expenses, merger-related expenses, and intangible asset amortization expenses, non-operating retirement-related expenses or credit, pension defined benefit plan settlement expenses or income, Oracle litigation-related income, debt service costs, and tax adjustments.
HP's fourth-quarter net revenue was 16.675 billion U.S. dollars, an increase of 9.3% compared to 15.258 billion U.S. dollars in the same period last year; excluding the impact of exchange rate changes, HP's fourth-quarter net revenue increased by 6.9% compared with the same period last year. A performance also exceeded analysts' previous expectations. According to data provided by the Yahoo Finance Channel, 13 analysts had previously expected HP's fourth-quarter net revenue to reach 15.4 billion U.S. dollars.
According to US GAAP, HP's operating profit margin in the fourth quarter was 7.4%, an increase of 0.9 percentage points from 6.5% in the same period last year. Not in accordance with US GAAP, HP's adjusted operating profit margin in the fourth quarter was 8.1%, an increase of 1.2 percentage points from 6.9% in the same period last year.
Performance of each department in the fourth fiscal quarter
According to business divisions, HP Personal Systems Group’s fourth-quarter revenue was 11.795 billion U.S. dollars, an increase of 13% compared to 10.432 billion U.S. dollars in the same period last year. Excluding the impact of exchange rate changes, it increased by 10%. The operating profit margin for the fourth fiscal quarter was 6.5%. Among them, the commercial sector's net revenue increased by 25% year on year, and the personal consumer sector's net revenue decreased by 3% year-on-year; total shipments decreased by 9% year-on-year, of which notebook shipments decreased by 12% year-on-year, and desktop shipments increased year-on-year 2%.
Within the Personal Systems Group, by product, HP’s fourth-quarter net revenue from notebooks was US$8.339 billion, an increase of 13% from US$7.405 billion in the same period last year net revenue from desktop computers was 25.10 Billion US dollars, an increase of 11% compared to 2.253 billion US dollars in the same period last year; net revenue from workstations was 492 million US dollars, an increase of 39% compared to 355 million US dollars in the same period last year; net revenues from other products were 454 million U.S. dollars, an increase of 8% compared with 419 million U.S. dollars in the same period last year.
HP Printing Group's fourth-quarter revenue was US$4.879 billion, an increase of 1% compared to US$4.826 billion in the same period last year. Excluding the impact of exchange rate changes, it was flat year-on-year; the operating profit margin was 17.0%. In the fourth fiscal quarter, total hardware shipments fell 26% year-on-year, with commercial hardware shipments down 12% year-on-year, and personal hardware shipments down 28% year-on-year. The net revenue of the personal hardware business fell 6% year on year, while the commercial hardware revenue increased 19% year on year.
HP's fourth-quarter corporate investment was $2 million, compared to zero in the same period last year.
HP's fourth-quarter material revenue was US$3.057 billion, a decrease of 2% from US$3.131 billion in the same period last year. Excluding the impact of exchange rate changes, it was a year-on-year decrease of 3%.
Annual performance
Throughout the 2021 fiscal year, HP's net revenue was 63.5 billion U.S. dollars, an increase of 12.1% compared with the 2020 fiscal year's 56.6 billion U.S. dollars. Excluding the impact of exchange rate changes, it increased by 10.2% year on year, exceeding analyst expectations. HP's 2021 fiscal year's net profit was 6.5 billion U.S. dollars, an increase of 129% compared with the 2020 fiscal year's 2.8 billion U.S. dollars. Hewlett-Packard's 2021 fiscal year's diluted earnings per share were US$5.33, an increase of 167% from the 2020 fiscal year of US$2.00. Excluding one-time items (not in accordance with US GAAP), HP’s adjusted net profit for fiscal 2021 was US$4.6 billion, an increase of 43% compared with the US$3.2 billion in fiscal 2020; adjusted earnings per share were 3.79 The US dollar increased by 66% compared to US$2.28 in the same period last year, which also exceeded expectations.
According to data provided by the Yahoo Finance Channel, 18 analysts had previously expected HP's 2021 fiscal year revenue to reach 62.26 billion US dollars on average, and 18 analysts had previously expected HP's 2021 fiscal year adjusted earnings per share to reach 3.73 US dollars.
HP's operating profit margin for fiscal 2021 was 8.4%, an increase of 2.3 percentage points from 6.1% in fiscal 2020. Not in accordance with US GAAP, HP's operating profit margin for fiscal 2021 is 9.1%, an increase of 1.9 percentage points from 7.2% in fiscal 2020.
Other financial information
Hewlett-Packard's fourth-quarter total costs and expenditures were 15.437 billion U.S. dollars, compared with 14.266 billion U.S. dollars in the same period last year. Among them, the cost of revenue was 13.41 billion U.S. dollars, compared with 12.579 billion U.S. dollars in the same period last year; R&D expenditure was 445 million U.S. dollars, compared with 381 million U.S. dollars in the same period last year; sales, general affairs, and administrative expenses were 1.474 billion U.S. dollars. Compared with the same period last year, it was 1.244 billion U.S. dollars; restructuring and other expenses were 29 million U.S. dollars, compared with 310 billion U.S. dollars in the same period last year; M&A related expenses were 28 million U.S. dollars, compared with 2 million U.S. dollars in the same period last year; Intangible asset amortization expenses were 51 million U.S. dollars, compared with 29 million U.S. dollars in the same period last year.
HP's net cash provided by business operations in the fourth quarter was US$2.8 billion. As of the end of the fourth fiscal quarter, HP's total accounts receivable was $5.5 billion; accounts receivable turnover days were 30 days, an increase of 1 day compared to the previous quarter. As of the end of the fourth fiscal quarter, the total value of HP's inventory was $7.9 billion, and the inventory days were 53 days, a decrease of 9 days compared with the previous quarter. As of the end of the fourth fiscal quarter, HP’s total accounts payable was $16.1 billion, and the accounts payable turnover days were 108 days, a decrease of 12 days compared with the previous quarter.
HP's free cash flow in the fourth quarter was US$900 million. Free cash flow includes US$2.8 billion in net cash provided by business operating activities and has gone through Oracle’s litigation-related revenue of US$1.771 billion, the net investment of US$33 million in leases, and 1.72 in property, factories, and equipment. 100 million US dollars in net investment adjustments.
In the fourth quarter, HP returned a total of $2 billion in cash to shareholders. Among them, HP distributed a cash dividend of US$219 million in this quarter. In addition, HP used $1.8 billion in cash to repurchase approximately 61 million shares of common stock on the open market in the fourth quarter. As a result, HP returned 210% of its free cash flow to company shareholders in the fourth quarter. As of the end of the fourth fiscal quarter, HP held a total of $4.3 billion in cash, including cash and cash equivalents and short-term investments.
HP's full-year fiscal 2021 business operating activities provided net cash of 6.4 billion U.S. dollars and free cash flow of 4.2 billion U.S. dollars. Free cash flow includes US$6.4 billion in net cash provided by business operations and has gone through Oracle’s litigation-related US$1.771 billion in revenue, net investment of US$111 million in leases, and 5.82 in property, factories, and equipment. 100 million US dollars in net investment adjustments. HP used approximately $6.2 billion in cash to repurchase approximately 224 million shares of common stock on the open market throughout the 2021 fiscal year. Coupled with HP's $938 million cash dividend in the 2021 fiscal year, the company returned 172% of its free cash flow to shareholders for the full year.
Performance Outlook
Hewlett-Packard predicts that in accordance with US GAAP, diluted earnings per share in the first quarter of the fiscal year 2022 will reach US$0.92 to US$0.98; if not in accordance with US GAAP, diluted earnings per share in the first quarter of the fiscal year 2022 is expected to reach US$0.99. US$1.05, exceeding analyst expectations. Not in accordance with US GAAP, HP’s estimate of diluted earnings per share from continuing operations for the first quarter of the fiscal year 2022 did not include after-tax expenses of US$0.07 per share. This expense is mainly related to restructuring and other Expenses, M&A-related expenses, intangible asset amortization expenses, non-operating retirement-related expenses or credit, tax adjustments, and related tax impacts of these items. According to data provided by the Yahoo Finance Channel, 13 analysts had previously expected HP’s adjusted earnings per share for the first fiscal quarter to reach US$0.94.
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