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A Look at HP’s Financial Goals for Fiscal 2017

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Nov. 20 2017, Updated 7:31 a.m. ET

Productivity improvements and EPS

HP (HPQ) has checked off most of the boxes with respect to its financial goals for fiscal 2017. It has estimated productivity improvements of $1 billion in fiscal 2017 and expects to surpass that target.

HP had estimated earlier that it would post non-GAAP (generally accepted accounting principles) EPS (earnings per share) of $1.55–$1.65 in 2017. It has now increased that to $1.63–$1.66. Analysts expect HP to post EPS of $1.65 in 2017.

While HP previously estimated free cash flow of $2.3 billion–$2.6 billion in fiscal 2017, it could possibly report free cash flow of ~$3 billion.

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How HP views fiscal 2018

HP is aiming to increase its dividends by 5% YoY (year-over-year) in fiscal 2018. It currently has a dividend yield of 2.6%, or $2.24 per year. Peers Apple (AAPL), Western Digital (WDC), and Seagate Technology (STX) have dividend yields of 1.6%, 2.2%, and 6.7%, respectively.

HP also wants to return ~$3 billion to shareholders in 2018 through share repurchases and dividends. It is looking to gain market share in core business segments and increase investments in A3 and graphics verticals as well as ramp up investments in 3D (three-dimensional) printing.

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