HP misses revenue estimates as inflation saps PC demand
9:00 pm Tuesday, May 30th, 2023
(Reuters) – HP Inc missed Wall Street targets for second-quarter revenue on Tuesday as inflation-hit customers spent less on the company’s personal computers, sending its shares down nearly 3% in extended trading.
Companies such as HP, Lenovo and Dell Technologies have seen demand ease from peaks hit during the pandemic, when work-from-home trends had driven up sales of laptops and other electronic devices.
Global PC shipments declined nearly 30% in the January-March period to levels lower than before the pandemic, according to data from research firm IDC.
Sales for HP’s Personal Systems segment – home to its desktop and notebook PCs – dropped 29% in the reported quarter, while the company’s printing segment recorded a 5% fall.
HP said it expects second-half revenue to be higher than the first half, even though the year-on-year comparison will still be negative.
“From a demand perspective, especially on the consumer side, the second half is stronger,” said CEO Enrique Lores in an interview with Reuters.
The PC maker now expects annual adjusted profit between $3.30 per share and $3.50 per share, compared with $3.20 to $3.60 forecast earlier.
Lores said that at a partner event this quarter, AI-driven opportunities were talked about, and added the company was working with key software and silicon partners to create new PC architectures that would drive a PC refresh in the coming years.
California-based HP’s second-quarter revenue was $12.91 billion. Analysts were expecting $13.07 billion, according to Refinitiv data.
On an adjusted basis, HP earned 80 cents per share, compared with expectations of 76 cents.
(Reporting by Tiyashi Datta in Bengaluru and Jeffery Dastin in Palo Alto; Additional reporting by Bharat Govind Gautam; Editing by Devika Syamnath and Christopher Cushing)
