HP Inc (NYSE:HPQ) Q3 2016 Earnings Conference Call - Final Transcript
Aug 24, 2016 • 05:00 pm ET
by the end of 2017.
In Q4 and beyond, the uncertainty in the market caused by Brexit could create challenges, particularly in EMEA. A negative impact in gross domestic product could introduce risk to our revenue, particularly supplies, given the correlation we have seen in the past. We will continue to provide updates as things progress and more definitive information is available.
As it relates to cash flow assumptions, in Q3, we started to note some issues with component supply availability in the Personal Systems market, given vendor shifting capacity to other product categories. In Q4, we intend to opportunistically leverage the balance sheet for assurance of supply, which is expected to increase owned inventory and extend the cash conversion cycle by a few days. We also expect our capital expenditures to be greater in Q4 as compared to Q3.
And lastly, we expect printing revenue to be better sequentially as compared to lower quarter-on-quarter revenue growth in Personal Systems. On a GAAP-only basis, we assumed a settlement expense of approximately $200 million for a lump sum offering made during Q3 to certain terminated vested participants in the US pension plan.
With all that in mind, Q4 '16, non-GAAP diluted net earnings per share is in the range of $0.34 to $0.37. Q4 '16, GAAP diluted net earnings per share from continuing operations is in the range of $0.20 to $.25. Our full-year fiscal 2016 non-GAAP diluted net earnings per share is in the range of $1.59 to $1.62. Our full-year fiscal '16 GAAP diluted net earnings per share from continuing operations is in the range of $1.46 to $1.49.
With that, let's open it up for questions.