HP Inc. fell short of revenue expectations for the second quarter, causing a drop of nearly 3% in its shares during extended trading. The company’s personal computers suffered from reduced PC sales as inflationary pressures led customers to spend less. This decline in demand is in line with the experiences of other major PC manufacturers, including Lenovo (and Dell Technologies, who have seen a decrease in demand after reaching peak levels during the pandemic. The surge in work-from-home arrangements during the pandemic had driven up sales of laptops and electronic devices, but the trend has now subsided.
A Dip In Global PC Shipments
According to data from research firm IDC, global PC shipments dropped by almost 30% in the January-March period, falling below pre-pandemic levels. Within HP, the Personal Systems segment, which includes desktop and notebook PCs, experienced a significant 29% decline in PC sales during the reported quarter. The printing segment also recorded a 5% fall.
Despite the disappointing results, HP expressed optimism for the second half of the year, projecting higher revenue compared to the first half. CEO Enrique Lores stated in an interview that consumer demand is expected to strengthen in the second half. The company now anticipates an annual adjusted profit between $3.30 and $3.50 per share, narrowing its previous forecast range.
To drive future growth, HP is focusing on AI-driven opportunities and collaborating with key software and silicon partners to develop new PC architectures. These initiatives aim to stimulate a PC refresh cycle in the coming years. Although HP’s second-quarter revenue reached $12.91 billion, slightly below the expected $13.07 billion, its adjusted earnings per share of 80 cents exceeded analysts’ projections of 76 cents.
HP‘s performance reflects the broader market conditions for PC manufacturers, with the industry experiencing a decline in demand after the initial surge caused by remote work requirements during the pandemic. The company’s strategic efforts and future investments in innovative technologies will be critical to regain momentum and adapt to evolving customer needs.