HP Revenues Fell 18 Percent in Previous Quarter

HP reported net earnings of $500 million on revenues of $13.8 billion in the quarter ending January 31. The latter is a decline of 18.8 percent year-over-year, but HP cited some progress in recovering from the disaster that struck the PC market last year, triggering a 2 percent stock rally.

“We delivered on our earnings per share target despite industry-wide headwinds, reflecting disciplined execution across our business,” HP president and CEO Enrique Lores said. “The plan we announced last quarter is having an immediate impact, as we continue to reduce our costs while maintaining investments in long-term growth.”

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HP’s quarter includes the last two months of 2022, and it was predictably bad given the conditions we’ve seen elsewhere in the PC business. Its Personal Systems business unit reported that net revenue was down 24 percent to $9.2 billion, with units sold down 28 percent overall, consumer units sold down 33 percent, and commercial PC units sold down 24 percent.

HP’s Printing business reported a net revenue of $4.6 billion, down 5 percent. But total hardware units sold were up 2 percent overall.

HP said earlier that it would eliminate 4,000 to 6,000 jobs through 2025, and it reported that 900 U.S.-based employees would retire voluntarily. It also adjusted its profit estimates for the current quarter upwards and re-affirmed its full-year earnings estimate, noting that supply chain issues are easing up and that this will result in improved shipment rates.

“In our second half, channel inventory will have normalized and therefore just because of normal seasonality the sales of PCs will be stronger,” Mr. Lores said told investors. PC sales are still expected to fall this year, but only in the single digits, compared to the double-digit declines we saw in late 2022.

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