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Hewlett-Packard Company (NYSE:HPQ) Plans to Return At Least 50% Of Its Free Cash Flow To Its Shareholders

Boston, MA 10/16/2014 (wallstreetpr) – Hewlett-Packard Company (NYSE:HPQ) indicated that it was committed to its fiscal capital allocation strategy of the current year, as well as, next year. As part of it, the company plans to return a minimum of 50% of its free cash flow to its shareholders. It would be done by way of dividends or share buyback program.

Resumes Share Buyback

Hewlett-Packard Company (NYSE:HPQ) disclosed that it would resume its share buyback program under the existing authorization plan, its statement revealed. It had suspended the share repurchase program due to non-public information possession of material. Since it lo longer possesses such information, it has resumed the share buyback activities.

Hewlett-Packard said that it wanted to make up the shortfall in the remainder of the current fiscal year, as well as, the next fiscal year. Its 50% return of free cash flow to shareholders meant by way of dividends and share buyback program.

The company’s VP and CFP, Cathie Lesjak, expressed the confidence on Hewlett-Packard Company (NYSE:HPQ)’s strategy and its capacity to execute. Aside from this, the CFO said that its share price does not indicate the company’s intrinsic value.

Outlook Reaffirmed

HP has reaffirmed its adjusted earnings forecast of $3.70 – $3.74 a share for the fiscal year 2014. The forecast excluded costs on an adjusted basis. It projected GAAP earnings of $2.60 $2.64 a share. The move comes on the heels of Intel Corporation (NASDAQ:INTC) reporting a better than expected earnings results for the third quarter.

Similarly, for the fiscal year 2015 too, Hewlett-Packard Company (NYSE:HPQ) has reiterated its adjusted earnings of $3.83 – $4.03 a share. It projected GAAP earnings of $3.23 – $3.43 a share. It said that the adjusted guidance excluded amortization and intangible assets besides restructuring charges of 60 cents a share. It indicated that the forecast does not reflect one-time GAAP charges associated with the separation transaction disclosed on October 6. It included tax and advisory costs that would be quantified later.

Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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