By Stephen Nellis
(Reuters) – HP Inc on Wednesday beat Wall Street estimates for second-quarter revenue, signaling a recovery in the PC market as customers upgrade their systems.
Like other PC makers, HP experienced a sales surge during the pandemic as consumers, businesses and schools stocked up on tech products, only to see sales decline for two years. That slump is just now easing.
HP is hoping to ride out a wave of upgrades after Microsoft last week unveiled a slew of new AI features designed to work on a new generation of PCs.
Chief Executive Enrique Lores told Reuters in an interview that he expects about 10% of HP’s PC sales in the second half of fiscal 2024 to come from such “AI PCs.”
“The AI PCs will really be more meaningful in 2025,” Lores said on Wednesday.
“Our (fiscal) year ends at the end of October. So we’re really still at the beginning of the next generation AI PC space.”
Lores said education customers boosted revenue in the second quarter, with schools upgrading their systems after a nearly two-year drop in demand due to COVID-19.
HP posted second-quarter revenue of $12.8 billion, above the average analyst estimate of $12.6 billion, according to LSEG data.
In the reported quarter, revenue from HP’s personal systems segment – home to its desktop and notebook PCs – rose 3% from a year ago, while its printing segment posted an 8% decline.
The company now expects adjusted earnings for fiscal 2024 to be between $3.30 and $3.60 per share, compared to its previous guidance of between $3.25 and $3.65 per share. The midpoint of the full-year range was $3.45, above analyst estimates of $3.43.
It expects adjusted earnings per share with a midpoint of 85 cents in the third quarter ending in July, in line with the average analyst estimate of 85 cents.
(Reporting by Jaspreet Singh in Bengaluru, Juby Babu in Mexico City and Stephen Nellis in San Francisco; Editing by Maju Samuel)
