HP Inc. surpassed Wall Street expectations for its second-quarter revenue, signaling a promising rebound in the personal computer (PC) market as customers begin upgrading their systems. The company reported revenue of $12.8 billion, exceeding the analysts’ average estimate of $12.6 billion, according to LSEG data.
The PC market, which saw a surge during the pandemic as consumers, businesses, and schools invested in tech products, had faced a two-year slump in sales. This downturn is now showing signs of easing, and HP is optimistic about future growth driven by new technology advancements.
HP CEO Enrique Lores highlighted the potential of “AI PCs” in an interview with Reuters. Following Microsoft’s recent unveiling of new AI features designed for next-generation PCs, Lores expects about 10% of HP’s PC sales in the second half of fiscal 2024 to come from these AI-enhanced devices. “The AI PCs will be really more meaningful in 2025,” Lores said. “Our fiscal year finishes by the end of October. So we will really be at the very beginning still of the next-generation AI PC space.”
The education sector played a significant role in the second-quarter sales increase, with schools upgrading their systems after a nearly two-year demand slump post-COVID-19. HP’s personal systems segment, which includes desktop and notebook PCs, saw a 3% year-over-year sales rise, while its printing segment experienced an 8% decline.
HP has adjusted its fiscal 2024 profit expectations, now projecting an adjusted profit of $3.30 to $3.60 per share, compared to its previous outlook of $3.25 to $3.65 per share. The midpoint of this range, $3.45, is above analyst estimates of $3.43. For the third quarter ending in July, HP anticipates an adjusted profit per share midpoint of 85 cents, aligning with analysts’ average estimate of 85 cents.
The company’s performance reflects a broader recovery in the tech sector, with the promise of AI innovations poised to drive further growth. As HP navigates this evolving landscape, it remains well-positioned to capitalize on emerging opportunities in the AI PC market and beyond.