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02 October 2023

HP misses revenue estimates as inflation saps PC demand

By Reuters

HP Inc (HPQ.N) 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 (0992.HK) and Dell Technologies (DELL.N) 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.