HP forecasts downbeat first-quarter profit amid slow PC market recovery By Reuters
© Reuters. The logo for The Hewlett-Packard Company is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 27, 2018. REUTERS/Brendan McDermid
By Samrhitha A
(Reuters) – HP Inc (NYSE:) on Tuesday forecast first-quarter profit below Wall Street estimates but maintained its annual earnings outlook, in a sign that demand in the personal computers market is still recovering.
Companies such as HP, Lenovo and Dell Technologies (NYSE:) have seen demand ease from peaks hit during the pandemic, when work-from-home trends drove up sales of laptops and other electronic devices.
HP expects first-quarter adjusted profit per share to be in the range of 76 cents to 86 cents, the midpoint of which was lower than analysts’ average estimate of 86 cents, according to LSEG data.
The company said it is on track to launch its AI PCs in the second half of next year and expects its penetration to increase gradually.
“Don’t think the market will immediately shift to AI PCs, we think there will be some penetration in ’24 and stronger in ’25,” Chief Executive Enrique Lores said in a media call.
Recent earnings at major PC chipmakers, including Intel (NASDAQ:) and Advanced Micro Devices (NASDAQ:), have also signaled that more than a two-year long slump in the market could be nearing an end as demand picks up ahead of the holiday season and an expected Windows update next year from Microsoft (NASDAQ:).
HP maintained its fiscal 2024 adjusted profit forecast range of $3.25 to $3.65 per share.
Its revenue for the fourth quarter stood at $13.82 billion, slightly lower than LSEG estimates of $13.85 billion.
“Continue to see weak demand in China both across consumer and commercial and at this point we don’t expect that to change,” Lores said.
Sales for HP’s personal systems segment — home to its desktop and notebook PCs — fell 8% from a year ago, while its printing segment posted a 3% fall.