Compared to Estimates, HP (HPQ) Q3 Earnings: A Look at Key Metrics

HP (HPQ) reported Q3 2025 revenue of $13.93 billion, a 3.1% year-over-year increase, narrowly missing the $13.96 billion consensus estimate, while EPS of $0.75 met expectations but was down from $0.83 a year ago. Personal Systems revenue grew 6% year-over-year to $9.93 billion, slightly below estimates, driven by commercial and consumer segments, contrasting with a 3.8% year-over-year decline in Printing revenue to $3.99 billion, which nonetheless edged past expectations. The company's stock has outperformed the S&P 500 over the past month.

Analysis

HP's Q3 2025 results present a mixed financial picture defined by a divergence between its core segments. While total revenue grew 3.1% year-over-year to $13.93 billion, it narrowly missed the Zacks Consensus Estimate of $13.96 billion. More concerning for profitability, EPS of $0.75 was down from $0.83 in the prior-year quarter, although it met analyst expectations exactly. The Personal Systems division was the primary growth driver, with revenue up 6% YoY to $9.93 billion, fueled by a 7.5% rise in the consumer sub-segment. However, this growth was offset by continued weakness in the Printing division, where revenue fell 3.8% YoY, led by an 8.2% drop in consumer printing. Despite the top-line miss, operational earnings for Personal Systems at $541 million did beat estimates. Minor signs of working capital pressure appeared, with Days Sales Outstanding and Days in Accounts Payable both ticking slightly above projections. The stock's 5.2% gain over the past month, outperforming the S&P 500, suggests the market may be focusing more on the PS segment's growth and operational beats rather than the headline revenue miss and printing decline.

Key Decisions for Investors

• Investors should weigh the sustainability of the 6% growth in the Personal Systems division against the persistent 3.8% decline in the Printing business, as this bifurcation is key to HP's valuation.
• The year-over-year decline in EPS from $0.83 to $0.75, despite meeting estimates, signals potential margin pressure and warrants scrutiny of the company's future cost structure and pricing power.
• Given the stock's recent outperformance and the mixed results, it may be prudent to hold existing positions while monitoring for a turnaround in the high-margin Printing segment before increasing exposure.
• Pay close attention to working capital metrics in subsequent quarters, as the slight increase in Days Sales Outstanding could indicate early pressure on the company's cash conversion cycle.