HP, who recently hired Rob Wilkinson a former Toshiba PC executive, as their consumer channel lead, has reported a massive fall in revenues as the PC market struggles to lift sales.
Global revenue declined 22% to US$12.9 billion, this was a worse-than-expected drop in consumer PC sales, the company admitted last night.
HP’s Personal Systems sales fell 29% to US$8.2 billion, compared with analysts’ average estimate of US $8.4 billion.
Chief Executive Enrique Lores said the wider forecast earlier in the year was due to uncertainty regarding the economy’s performance throughout the year but could now be narrowed with two quarters remaining.
The slump in demand for personal computers has also affected Dell and Lenovo.
CEO Lores remains optimistic, and the company affirmed its full-year forecast for cash flow.
“We think the second half will be stronger than the first,” Lores said, citing a reduction of inventory with channel partners.
In Australia retailers such as Harvey Norman The Good Guys and JB Hi Fi have taken to only ordering replacement stock for stock already sold. This eliminates the need to carry stock on their books running into the end of the financial year.
Free cash flow in the fiscal year ending in October will be about $3.25 billion. The guidance is the same as that issued in February and assumes improving demand for personal computers in the coming quarters. HP also narrowed its forecast for fiscal-year adjusted profit to $3.30 to $3.50 a share, topping analysts’ average estimate, according to data compiled by Bloomberg.
According to IDC the PC printer market showed “weak demand, excess inventory, and a worsening macroeconomic climate,” from January-March 2023 with further slowdowns tipped.
Printing revenue slipped 5% to $4.7 billion in the period ended April 30. Analysts, on average, projected $4.6 billion. The print business should perform similarly in the second half of the year, Lores said.
New data showing stability in hybrid work has some benefits for HP, despite this printing remains a category where spending continues to falter, she added.
Chief Financial Officer Marie Myers said the company is on-track to deliver 40% of its $1.4 billion in planned savings by the end of 2023.
