HP beats revenue estimate on recovering PC demand

HP beats revenue estimate on recovering PC demand

By Stephen Nellis

(Reuters) – HP Inc beat Wall Street estimates for its second-quarter revenue on Wednesday, signaling a recovery in the personal computer (PC) market as customers upgrade their systems.

Like other PC makers, HP experienced a sales boom during the pandemic as consumers, businesses and schools stocked up on tech products, then a two-year decline in sales followed. This recession has only just subsided.

HP is hoping to ride a wave of upgrades after Microsoft last week unveiled a host of new AI features designed to work on a new generation of PCs.

Chief Executive Officer Enrique Lores told Reuters in an interview that he expects about 10% of HP’s PC sales to come from these “AI PCs” in the second half of fiscal 2024. ‘business.

“AI PCs will really make more sense in 2025,” Lores said Wednesday.

“Our (fiscal) year ends (by) the end of October, so we will really be at the very beginning of the next-generation AI PC space.”

Lores said education customers drove sales in the second quarter as schools upgraded their systems after a nearly two-year drop in demand following COVID-19.

HP reported second-quarter revenue of $12.8 billion, above analysts’ average estimate of $12.6 billion, according to LSEG data.

During the reporting quarter, sales of HP’s personal systems segment – which houses its desktop and laptop computers – increased 3% from a year ago, while its printing segment saw a decline of 8%.

The company now expects adjusted earnings for fiscal 2024 to be between $3.30 and $3.60 per share, compared to a previous outlook of between $3.25 and $3.65 per share. The midpoint of the range for the full year was $3.45, above analyst estimates of $3.43.

It expects adjusted earnings per share at a midpoint of 85 cents for the third quarter ending in July, in line with analysts’ average estimate of 85 cents.

(Reporting by Jaspreet Singh in Bangalore, Juby Babu in Mexico and Stephen Nellis in San Francisco; editing by Maju Samuel)

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