HP misses first-quarter revenue estimates on sluggish demand in PC market

By Jaspreet Singh

(Reuters) -HP Inc missed Wall Street estimates for first-quarter revenue on Wednesday, marking a seventh straight quarter of decline, driven by sluggish demand in the personal computers (PC) market as customers delay system upgrades.

Shares of HP, which is the second-largest PC vendor in the world after China’s Lenovo Group, fell more than 3% in extended trading.

Enterprise customers are keeping a tight leash on their budgets and spending cautiously in the wake of an uncertain economy, hitting demand for companies that provide personal computing devices such as HP Inc.

Revenue growth started to slow in 2022 as the work-from-home demand boom for PCs and electronics faded.

China continues to be a weak market for both consumer and commercial, but the overall market also remains volatile and inconsistent across regions, CEO Enrique Lores said in a media call.

The PC maker said November-to-January revenue fell about 4.4% to $13.19 billion, compared with analysts’ average estimates of $13.56 billion, according to LSEG data.

Its adjusted earnings per share came in at 81 cents, in-line with target estimate.

HP forecast second-quarter adjusted profit per share between 76 cents and 86 cents, the midpoint of which is in line with estimates of 81 cents.

Sales at HP’s Personal Systems segment — home to its desktop and notebook PCs — fell 4% from a year ago, while its Printing segment posted a 5% fall.

Last week, its peer Lenovo Group reported stronger-than-expected earnings in the third quarter, with revenue returning to growth after five quarters of decline. Dell is expected to report its fourth-quarter results on Thursday.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Alan Barona and Shailesh Kuber)