On a constant demand from businesses upgrading computer systems, HP Inc. reported revenue and earnings beyond analysts’ expectations.
Nonetheless, the results indicated that the hardware company may face some challenges in the future, as consumer spending on personal computers and printers declined.
HP’s fiscal second-quarter revenue grew 3.9% to $16.5 billion, according to the California-based company. Analysts predicted $16.1 billion on average. The majority of the benefits came from increased demand for desktop computers among businesses. The company’s fiscal second-quarter profit, excluding certain adjustments, was $1.08 per share, exceeding expectations.
- Commercial sales drove a 9.2% gain in revenue for HP’s Personal Systems division to $11.5 billion. Consumer sales, on the other hand, fell 6% and notebook units fell 23% in the four-week period ending April 30. Revenue from printing fell 7% to $5 billion, with total hardware units falling 23%.
- Industrywide, PC shipments fell 6.8% in the first three months of the year, owing to lower demand, particularly for Chromebooks used in schools.
HP Chief Financial Officer Marie Myers noted, “Despite the tougher consumer, we’re absolutely seeing strength on commercial. The commercial side currently accounts for about 65% of our portfolio, and I believe that trend will continue.”
- After closing at $38.84 in New York, the stock gained roughly 2% in extended trading. The stock has risen 3% this year, defying the typical trend of technology stocks falling.
- In March, HP paid $3.3 billion for Poly, formerly known as Plantronics Inc., a company that offers phone headsets and other audio and video peripherals, in order to expand its remote work equipment. The takeover is expected to be completed by the end of 2022, subject to shareholder and regulatory clearance.