It looks like HP Inc.‘s business is starting to settle down, and the company is optimistic about more growth in the market for personal computers with artificial intelligence.
In the fiscal second quarter, HP’s HPQ, -1.03% sales fell about 1% to $12.8 billion. However, this was the fourth quarter in a row that the rate of decline slowed down. Also, revenue was higher than the $12.61 billion that most people thought it would be.
The company made $8.4 billion in personal systems, which is 3% more than the previous year. Analysts tracked by FactSet were expecting $8.3 billion. It was about the same as everyone else’s guess that printing sales would go down 8% to $4.4 billion.
After business hours on Wednesday, shares went up 2.1%.
During a conference call with reporters, CEO Enrique Lores said that the company expects the printer business to stabilise in the second half of the fiscal year. This is because of comparisons with the same time last year.
Lores is optimistic about the future of PCs that have AI built in. He said that in the second half of this fiscal year, those could make up 10% of shipments.
He said, “Because of the adoption cycle, this will probably be a little heavier on the consumer side.” For business customers, “this is just because of the length of the cycles” because they “need to evaluate them before they will buy in large quantities.”
He thinks that commercial will make up a bigger part of AI PC shipments over time.
He said that right now, Windows 11 and trends within a company’s installed base are driving the corporate refresh cycle. But he thinks that corporate customers will see the productivity value in the end.
“This will really make you work faster and better than before, which will have a big effect on our customers,” he said.
AI PCs are part of a new trend towards more AI on devices, and companies like Microsoft Corp. have been showing off new AI-related products at conferences over the last few weeks.
HP’s net income dropped from $1.05 billion, or $1.06 a share, in the same quarter last year to $607 million, or 61 cents a share, in the most recent quarter.
It made 82 cents per share, which is a penny more than what most people thought it would be. This is up from 79 cents the previous year.
HP thinks that its adjusted earnings per share for the fiscal third quarter will be between 78 cents and 92 cents, while analysts were expecting it to be 85 cents.
“We still think the second half will be better than the first.”
Leslie Lores said
