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HP earnings miss estimates as computer sales slow

Yahoo Finance's Jared Blikre breaks down Q3 earnings results for HP Inc.

Video Transcript

DAVE BRIGGS: All right, continuing with the earnings alerts. Hewlett-Packard just reported earnings after the bell. Yahoo Finance's Jared Blikre has the numbers for us. Jared.

JARED BLIKRE: That's right. A difficult quarter for HP and let's dive into the numbers there. Stock down about, what is that, 4% or 5% in after hours trading. So third quarter adjusted EPS coming in at $1.04. And that was $0.01 short of the estimate of $1.05. Net revenue also missed by about $900 million-- $14.7 billion. That is down 3.9% year-over-year.

The estimate was for a bit higher at $15.6 billion. That breaks down into personal systems revenue of $10.1 billion. That's off by about $1.05 billion from the Street estimate. Printing revenue $4.58 billion. The estimate was for a tiny bit higher, $4.77 billion.

And then their operating margin-- that was a figure that beat. That came in at 9.5%. The estimate was for 8.76%. Free cash flow, $300 million versus the estimate of $1.32 billion. So a bit of disappointment right there.

And then shares repurchased, 29.3 million shares. And that amounts to $1.03 billion in stock. Now, the guidance, that's what the Street is waiting for-- they're seeing adjusted EPS of $0.79 to $0.89 for the fourth quarter. That is quite a bit lower than the estimate of $1.07.

For the full year, they're seeing adjusted EPS of $4.02 to $4.12. They previously saw $4.24 to $4.38, and the estimate was $4.30. So missing on-- they're lowering the revenue-- excuse me, they're lowering their guidance in terms of adjusted EPS below the Street estimate.

They're also seeing free cash flow of $3.2 to $3.7 billion. That is handily lower than the estimate of $4.55 billion. And I was reading before a statement by Gartner-- this is one of the worst quarters-- in fact, the worst quarter for PC sales in about nine years.

Now, I do have a quote from the President and CEO Enrique Lores. He said, we are taking clear actions to mitigate near-term market headwinds and further strengthen our business for the future. So you can see a bit of weakness there for HP, Inc in after hours trading.