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Hewlett-Packard sales slump worse than expected

Tan KW
Publish date: Thu, 01 Jun 2023, 07:58 AM
Tan KW
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NEW YORK: Hewlett-Packard (HP) Inc reported sales that fell further than analysts’ estimated, a sign the company continues to be hamstrung by the ongoing slump in demand for personal computers (PCs).

Revenue declined 22% to US$12.9bil on a worse-than-expected drop in consumer PC sales, the company said in a statement.

HP’s Personal Systems segment fell 29% to US$8.2bil , compared with analysts’ average estimate of US$8.4bil .

“The macro situation is obviously impacting demand across industries,” chief executive officer Enrique Lores said in an interview.

Still, 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 and the traditionally high back-to-school and holiday sales seasons.

Free cash flow in the financial year ending in October will be about US$3.25bil .

The guidance is the same as that issued in February and assumes improving demand for PCs in the coming quarters.

HP also narrowed its forecast for the financial year adjusted profit to US$3.30 to US$3.50 a share, topping analysts’ average estimates, according to data compiled by Bloomberg.

The PC market showed “weak demand, excess inventory, and a worsening macroeconomic climate,” from January to March, industry analyst IDC reported last month.

Printing revenue slipped 5% to US$4.7bil in the period to April 30. Analysts, on average, projected US$4.6bil .

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, Meta Marshall, an analyst at Morgan Stanley, wrote in advance of the results.

Printing, however, remains a category where spending continues to falter, she added.

 - Bloomberg

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