HP's Steady Q4: Navigating Tariffs and Economic Uncertainty

HP Inc. recently reported its fiscal Q4 2024 earnings, which were in line with market expectations. Despite the challenging geopolitical and economic environment, HP managed to maintain steady growth, highlighting its resilience and strong management. HP's CEO, Enrique Lores, discussed how the company is well-positioned to navigate potential tariff impacts, emphasizing its focus on cost competitiveness and supply chain diversification.



HP's revenue for the quarter came in at $14.1 billion, up 1.7% from the prior year. Non-GAAP earnings per share (EPS) were $0.93, meeting analyst expectations. The company's Personal Systems segment, which includes PCs, saw revenue growth of 5%, while the Printing segment grew by 1%. HP's operating margin for the quarter was 8.5%, slightly down from the prior year but still a solid performance.



One of the key challenges facing HP and the broader tech industry is the potential impact of tariffs on production costs and market competitiveness. In response to this threat, HP has been proactive in building a more resilient supply chain, with Lores noting that the company has spent the past three years establishing factories in various parts of the world. This diversification allows HP to move manufacturing assets around more easily, mitigating the potential impact of tariffs.

HP's strategic approach to managing costs and inventory levels has also helped it navigate potential tariff-related price increases and pass-through effects to consumers. By focusing on cost competitiveness and reducing costs, HP has been able to maintain a strong position in the market, even in the face of potential tariff-related challenges.



The company's robust management and diverse product portfolio have enabled HP to maintain market share, particularly in segments where pricing is a major differentiator, such as printers and entry-level PCs. Furthermore, HP's integration of technology and innovation into its products and operations has bolstered its supply chain resilience and enabled it to better navigate potential tariff-related disruptions.

In conclusion, HP's fiscal Q4 2024 earnings demonstrate the company's ability to maintain steady growth and adapt to challenges in the global economy. By focusing on supply chain diversification, cost management, and innovation, HP is well-positioned to navigate potential tariff impacts and continue delivering value to its shareholders. As an investor, HP's enduring business model and strong management make it an attractive option for a balanced portfolio, combining growth and value stocks.