HP Inc: A Journey of Innovation and Market Leadership

Founded in 1939, Hewlett-Packard Company (HP) was the brainchild of two friends, Bill Hewlett and Dave Packard. The company was however formalised in the 1940s when it moved to Palo Alto, California and began operations. HP was eventually incorporated on 18 August 1947. In 1951, the company invented the 524A high-speed frequency counter, which, with spin-off products, would go on to earn billions for HP. The company went public in 1957 with shares selling for $16. By 1959, HP expanded abroad establishing facilities in Switzerland and Germany.

The 1960s saw HP achieve great innovation in terms of product development. In 1963 the company invented the frequency synthesiser used aboard vehicles headed for deep space, and in 1964 HP launched the atomic clock which could coordinate international time to within a millionth of a second. In 1966 the company released its first personal computer which really was a scientific calculator, model number HP 9100A. In 1974, HP introduced the first programmable pocket calculator in the world.

Jumping ahead to the 1980s and 1990s, HP aimed to make computers and printers more affordable for the average consumer. This 20-year period also saw the company release a range of innovative, globally renowned products.

This included the HP-85, its first PC that can communicate with other computers, HP-150 Touchscreen PC, HP LaserJet (which quickly became the most popular laser printer worldwide), and the affordable colour printer HP DeskJet 500C. The company also released the HP OfficeJet that can print, fax and copy. This innovation continued into the 2000s. 

Hewlett-Packard splits into two companies

On 1 November 2015, HP Inc. (NYSE: HPQ; Market Cap: $24.8 billion) completed the spin-off of Hewlett Packard Enterprise Company (NYSE: HPE; Market Cap: $26.0 billion).

As part of the spin-off, HPQ shareholders received one share of HPE stock for each share of HPQ stock they owned as of the record date, 21 October 2015. Trading for HPE shares began on 2 November 2015, on the NYSE under the symbol “HPE.”

On its first day of regular trading, HPE opened at $14.99, dropped by 1.6%, and closed at $14.49, with a trading range between $13.86 and $15.17. Meanwhile, HPQ shares, which no longer include HPE, opened at $12.47 and closed at $13.83, trading between $12.41 and $14.00. HPQ no longer retains any ownership interest in HPE.

Market capitalisation and shareholding

HP has a market cap value of $32.11 billion, with revenue amounting to $53.32 billion and a net income of $2.84 billion. HP is listed on the New York Stock Exchange (NYSE) with the ticker symbol HPQ.  

The company’s largest institutional shareholders include Vanguard Group Inc, BlackRock Inc., State Street Corp, Dodge & Cox Inc, Bank of America Corporation, Primecap Management Company, Geode Capital Management, LLC, Pacer Advisors, Inc, LSV Asset Management, and Morgan Stanley.

HP Inc. reports fiscal 2024 third quarter results

On 28 August 2024, HP Inc. and its subsidiaries reported fiscal 2024 third-quarter net revenue of $13.5 billion, reflecting a 2% year-over-year increase (3% in constant currency). The company posted a GAAP diluted net EPS of $0.65, down from $0.76 in the prior year, but within its projected outlook of $0.63 to $0.77.

On a non-GAAP basis, HP’s diluted EPS was $0.83, down slightly from $0.86 in the same period last year, also aligning with its forecast of $0.78 to $0.92. The non-GAAP results exclude $179 million, or $0.18 per diluted share, in after-tax adjustments tied to restructuring, acquisition charges, amortization of intangible assets, and other related costs.

In the third quarter of fiscal 2024, HP generated $1.4 billion in net cash from operating activities and $1.3 billion in free cash flow. Accounts receivable ended the quarter at $4.7 billion, remaining flat at 31 days, while inventory decreased by three days to 67 days, totalling $7.8 billion. Accounts payable stood at $15.4 billion, a slight decline by one day to 131 days.

During the quarter, HP returned $0.9 billion to shareholders through share repurchases and dividends, repurchasing 17.1 million shares for $0.6 billion. The company increased its share repurchase authorization to $10.0 billion and ended the quarter with $2.9 billion in gross cash, which includes $2.8 billion in cash and equivalents, $93 million in restricted cash, and $3 million in short-term investments.

Environmental sustainability

HP is pursuing an ambitious, multi-faceted strategy to reduce its environmental impact, targeting emissions, energy, waste, and water use across its operations. It has planted over 1.5 million trees in collaboration with key environmental organizations like WWF, Arbor Day Foundation, and Conservation International. Since 2019, HP has used 30.5 million bottles of ocean-bound plastic (OBP) in more than 370 products, while in 2023, 18% of the company’s plastic materials came from recycled sources, equivalent to 34,400 tonnes. HP has also made significant strides in renewable energy, with 59% of its energy sourced from renewables.

In efforts to combat deforestation, HP ensures that paper and packaging materials for its printers, PCs, and displays are recycled or certified. Furthermore, HP’s Sustainable Forests Collaborative works to protect and restore forests, addressing the environmental impact of both HP and non-HP paper used in its printing products.

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