HP Exceeds Revenue Expectations as PC Demand Rebounds

tech360.tv
May 30, 2024
2 min read

HP beats Wall Street's revenue estimates for Q2, signaling a recovery in the PC market. Education customers drive sales growth as schools upgrade their systems. HP expects AI PCs to contribute significantly to sales in the coming years.

This achievement signals a strong recovery in the personal computer (PC) market, as customers continue to upgrade their systems.

During the pandemic, HP, like other PC manufacturers, experienced a surge in sales as consumers, businesses, and schools sought to equip themselves with essential tech products. However, this was followed by a two-year sales slump. Fortunately, the company is now witnessing a gradual easing of this slump.

HP is optimistic about the future, as Microsoft recently unveiled a range of new artificial intelligence (AI) features designed specifically for the next generation of PCs. Chief Executive Enrique Lores revealed in an interview with Reuters that he expects around 10% of HP's PC sales to come from these "AI PCs" in the second half of the company's fiscal year 2024. Lores further emphasised that the impact of AI PCs will be even more significant in 2025.

Lores attributed the second-quarter sales growth to education customers, particularly schools that have been upgrading their systems after a prolonged demand slump caused by the COVID-19 pandemic.

In terms of financial performance, HP reported second-quarter revenue of $12.8 billion, surpassing analysts' average estimate of $12.6 billion, according to LSEG data. Within the same period, sales of HP's personal systems segment, which includes desktop and notebook PCs, increased by 3% compared to the previous year. However, the printing segment experienced an 8% decline.

Looking ahead, HP has revised its adjusted profit outlook for fiscal year 2024. The company now expects the adjusted profit per share to be in the range of $3.30 to $3.60, compared to the previous range of $3.25 to $3.65 per share. The midpoint of the revised range, $3.45, exceeds analyst estimates of $3.43.

For the third quarter ending in July, HP anticipates an adjusted profit per share with a midpoint of 85 cents, aligning with analysts' average estimate of 85 cents.

HP beats Wall Street's revenue estimates for Q2, signaling a recovery in the PC market.
Education customers drive sales growth as schools upgrade their systems.
HP expects AI PCs to contribute significantly to sales in the coming years.

Source: REUTERS