HP Inc. (HPQ) has reported a 3.21 percent rise in profit for the quarter ended Jan. 31, 2017. The company has earned $611 million, or $0.36 a share in the quarter, compared with $592 million, or $0.33 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $646 million, or $0.38 a share compared with $614 million or $0.36 a share, a year ago.
Revenue during the quarter grew 3.58 percent to $12,684 million from $12,246 million in the previous year period. Gross margin for the quarter contracted 94 basis points over the previous year period to 17.72 percent. Total expenses were 93.25 percent of quarterly revenues, up from 92.42 percent for the same period last year. That has resulted in a contraction of 83 basis points in operating margin to 6.75 percent.
Operating income for the quarter was $856 million, compared with $928 million in the previous year period.
"In Q1, we delivered earnings at the high end of our outlook range with strong free cash flow, driven by relentless execution and innovation," said Dion Weisler, president and chief executive officer, HP Inc. "We are confident in our ability to manage our business and deliver our FY17 financial commitments."
For the second-quarter 2017, HP Inc. forecasts diluted earnings per share from continuing operations to be in the range of $0.32 to $0.35. On an adjusted basis, the company expects diluted earnings per share to be $0.05 and forecasts diluted earnings per share to be in the range of $0.37 to $0.40.
Operating cash flow turns positive
HP Inc. has generated cash of $767 million from operating activities during the quarter as against cash outgo of $102 million in the last year period. The company has spent $86 million cash to meet investing activities during the quarter as against cash outgo of $111 million in the last year period.
The company has spent $638 million cash to carry out financing activities during the quarter as against cash outgo of $13,532 million in the last year period.
Cash and cash equivalents stood at $6,331 million as on Jan. 31, 2017, up 71.66 percent or $2,643 million from $3,688 million on Jan. 31, 2016.
Working capital remains negative
Working capital of HP Inc. was negative $812 million on Jan. 31, 2017 compared with negative $1,606 million on Jan. 31, 2016. Current ratio was at 0.96 as on Jan. 31, 2017, up from 0.90 on Jan. 31, 2016.
Cash conversion cycle (CCC) has increased to 37 days for the quarter from 1 days for the last year period. Days sales outstanding went down to 61 days for the quarter compared with 66 days for the same period last year.
Days inventory outstanding has decreased to 20 days for the quarter compared with 49 days for the previous year period. At the same time, days payable outstanding went up to 119 days for the quarter from 115 for the same period last year.
Debt remains almost stable
HP Inc. has witnessed an increase in total debt over the last one year. It stood at $6,788 million as on Jan. 31, 2017, up 0.83 percent or $56 million from $6,732 million on Jan. 31, 2016. Total debt was 24.08 percent of total assets as on Jan. 31, 2017, compared with 26.38 percent on Jan. 31, 2016.
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