HP’s performance in third quarter of 2022

Hewlett Packard (HP) is a leading brand of PCs, laptops, and printers. In the third quarter of 2022, the US based PC and printer brand experienced a decline in its net revenue compared to the same period in the last year.

In the third quarter of fiscal 2021, the company generated $15.3 billion in net revenue. However, during the third quarter of 2022, its net revenue was down to $14.7 billion or 4.1% less compared to the same period of the last year. The company experienced decline in sales across both its PC and printing segments. Its net earnings remained flat in the third quarter of 2022 compared to the same quarter of the prior year.

The following table shows HP's net revenue from each operating segment. The amounts are in millions of US dollars.

HP Personal Systems Segment in Q3 2022

HP generated $10.1 billion from the sales of personal systems (PCs and laptops) in the third quarter of 2022 which was 3% lower compared to the last year. The company experienced 20% decline in its consumer net revenue and a 7% growth in commercial net revenue in this segment in the third quarter of 2022 compared to the same quarter of the prior year. Its total unit sales including PCs, laptops and workstations were down 25%. While its notebook unit sales declined by 32%, the sales of PCs grew by 1% in the third quarter of 2022 compared to the third quarter of 2021.

HP’s revenue from the sales of notebooks in the third quarter of 2022 was $6.6 billion compared to $7.3 billion in the same quarter of the previous year. However, its revenue from the sales of desktops was up to $2.54 billion in Q3 2022 from $2.25 billion in Q3 2021. HP also experienced growth in its revenue from the sales of workstations in Q3 2022 compared to the same quarter of prior year. Its revenue from Workstations in Q3 2022 increased to $537 million compared to $388 million in Q3 2021.

The following table shows the revenues of HP from each product segment in its Personal systems operating segment for the third quarters of 2021 and 2022. The amounts are in millions of US dollars.

HP Printing segment in Q3 2022

The printing revenue of HP declined by 6% in quarter three of 2022 compared to the same quarter of the prior year. In the third quarter of 2022, HP generated $4.6 billion from its printing segment compared to $4.9 billion in the same quarter of the previous year. The company’s revenue in the printing segment declined 3% in commercial segment but grew 1% in consumer segment. Its net revenue from suppliers also declined by 9% in q3 2022 compared to the same quarter of the prior year. Total hardware unit sales in the printing segment declined by 3%. Consumer hardware unit sales were down 1% but commercial unit sales declined by 15% in the third quarter of 2022 compared to the same quarter of the last year.

In the printing segment, the supplies net revenue of HP was down to $2.8 billion in the third quarter of 2022 compared to $3.1 billion in the third quarter of 2021. Its commercial net revenue in the printing segment saw only a slight decline and was down to $1.04 billion in the third quarter of 2022 from $1.07 billion in the same quarter of the prior year. Printing revenue of HP in the consumer segment was slightly up at $725 million in Q3 2022 compared to $720 million in Q3 2021.

HP’s Revenue and Earnings in the first nine months of 2022

While HP’s net revenue has declined year over year in the third quarter, it has increased over the first nine months of 2022 compared to the same period in 2021. Over the first nine months of 2022, HP’s net revenue grew to $48.2 billion compared to $46.8 billion in the first three quarters of 2021.

HP’s net earnings in the third quarter of 2022 remained flat compared to the same quarter of the prior year. Its net earnings in Q3 2022 remained $1,119 million compared to $1,108 million in Q3 2021. Over the first nine months of 2022, the net earnings of the company remained $3.2 billion compared to $3.4 billion in the same period of 2021.

The following table compares the net revenues of HP from each operating segment for the first nine months of 2021 and 2022. The amounts are in millions of US dollars.

HP’s Costs and Expenses in Q3 2022

HP’s total costs and expenses declined slightly in the third quarter of 2022 compared to the third quarter of 2021. However, its total cost of revenue remained flat in the third quarter of 2022 when compared to the third quarter of 2021.

HP’s total costs and expenses in Q3 2022 were $13.4 billion compared to $13.9 billion in the third quarter of 2021. However, over the first three quarter of 2022 (first nine months of fiscal 2022), its total costs and expenses were higher than the same period of the prior year. Its total costs and expenses for the first nine months of 202 were $44.3 billion compared to $42.75 billion in the same period of the prior year.

HP’s total cost of revenue was $11.8 billion in the third quarter of 2022 compared to $11.9 billion in the same quarter of the previous year. However, over the first nine months of 2022, its total cost of revenue was higher compared to the previous year. In the first three quarter of 2022, HP’s total cost of revenue was $38.6 billion compared to $36.7 billion in the same period of the prior year.

HP spent only $368 million on research and development in the third quarter of 2022 compared to $477 million in the same quarter of the prior year. Its total research and development expenses during the first three quarters of 2022 were $1.2 billion compared to $1.5 billion, it had spent on R&D during the first nine months of 2021.

The SG&A (selling, general and administrative) expenses of the company were down to $1,143 million in the third quarter of 2022 compared to $1,408 million in the same period of the prior year. Over the first three quarters of 2022, its total SG&A expenses equalled $4,075 million compared to $4,267 million in the same period of 2021.

HP’s net revenue had remained higher during the first two quarters of 2022 compared to the same period of the prior year. In the first quarter of 2022, HP had generated $17 billion in net revenue compared to $15.65 billion in the first quarter of 2021. In the second quarter of 2022 also, its net revenue grew to $16.5 billion from the $15.9 billion in the same period of the prior year.

HP’s net earnings per share (EPS diluted) was $1.08 in the third quarter of 2022 compared to $0.92 in the same quarter of the prior year.