HP Inc. CEO Enrique Lores says the stage is set for a recovery in PC demand later this year, even if the outlook for the first half of 2024 looks mixed at best.
“Demand has slowed down in commercial,” but he expects growth to return for the PC market in the second half of the year.
Lores’s near-term caution in part reflects continued demand challenges in the computer and printer markets.
Laptop shipments fell 16% month over month in January, according to data from Citi analyst Christopher Danely. The trend was worse than the 14% quarter-on-quarter drop notched in the final three months of 2023.
For its first fiscal quarter, HP saw sales decline in both personal systems and printers divisions, the company announced today. Its total revenue of $13.2 billion missed analyst estimates of $13.58 billion, while its full-year guidance of $3.25 earnings per share also came in below expectations.
“We believe the PC recovery could moderate in 2024 given lackluster demand,” Danely said.
The AI PC is coming, Lores told earlier this year, which could lift his company’s top line. Until then, HP is maintaining a tight grip around costs to protect its margins.
As evidence of that, the company was able to expand quarterly profit margins year over year at both its divisions.
The earnings rundown
- Net sales: $13.2 billion (-4.4% year over year) vs. $13.58 billion estimated
- Personal systems sales: $8.8 billion (-4.4% year over year) vs. $9.2 billion estimated
- Printers sales: $4.4 billion (-5% year over year) vs. $4.39 billion estimated
- Diluted EPS: $0.81 (+11% year over year) vs. $0.81 estimated (guidance: $0.76-$0.86
What else caught our attention
Fiscal second quarter EPS guidance: $0.76 to $0.86 vs. $0.82 estimated
Full-year EPS guidance: $3.25 vs. $3.65 estimated (previous guidance: $3.25-$3.65)
