HP's Sales Plunge 9% Due to Weak PC Demand

U.S. Hewlett-Packard (HP) reported second-quarter results that fell short of market expectations due to weak demand for personal computers (PCs).

On the 29th (local time), HP announced in its earnings report that second-quarter revenue (its own fiscal 2023 third quarter) was $13.2 billion, down 9.9% from $14.6 billion in the same period last year. This slightly missed the market expectation of $13.4 billion. Adjusted earnings per share for the same period plunged 17% to $0.86 from $1.03 a year earlier but met market expectations.

By segment, personal systems revenue fell 12% to $8.9 billion, while printer segment revenue dropped 7% to $4.3 billion. Printer revenue significantly missed market expectations of $4.57 billion.

HP’s weak performance, driven mainly by PC and printer sales, stemmed from a global decline in PC demand. The PC market surged during the COVID-19 pandemic due to remote work and online classes but has since slowed as demand cooled. This is attributed to reduced consumer spending amid rising inflation and high interest rates worldwide, raising concerns about an economic downturn.

According to market research firm Canalys, global PC shipments in the second quarter fell 12% year-on-year. However, the decline eased compared to the 30% drop in the first quarter.

[Image source=AP Yonhap News]

Disappointment over the second-quarter results has also weighed on HP’s stock price. After the earnings announcement following market close, HP shares were down about 6% in after-hours trading as of 8:10 a.m. Korean time. During regular trading hours, HP shares closed up 0.13% at $31.37.

Enrique Lores, HP’s Chief Executive Officer (CEO), said, "Despite the challenging market environment, we delivered better results than our competitors this quarter," and expressed optimism that the PC business would stabilize and resume growth in the second half of the year. He added, "We expect revenue to increase in the third quarter due to the back-to-school and holiday seasons."

This content was produced with the assistance of AI translation services.