HP has projected a disappointing profit for the fourth quarter, falling short of Wall Street expectations, due to ongoing weakness in the personal computer market and intense competition. Despite revenue growth for the first time in over eight quarters, shares of the PC manufacturer dropped 3.7% in after-hours trading.
CEO Enrique Lores indicated that while the commercial PC segment is likely to maintain its momentum, the recovery in the print market is expected to be slow. He highlighted that the competitive environment remains challenging, particularly in the print and office sectors.
The company anticipates below-average seasonal growth for its personal systems segment, which includes desktops and notebooks. This cautious outlook follows a contraction in revenue growth in 2022, as the surge in demand for PCs and electronic products driven by the pandemic subsided.
Research firm IDC noted that weak demand in China, a major consumer of desktop PCs, continues to dampen the market. Nevertheless, global PC shipments, excluding China, grew over 5% year-over-year in the quarter ending June.
HP has revised its fiscal year 2024 adjusted profit forecast to between $3.35 and $3.45 per share, down from the previous range of $3.30 to $3.60. Analysts had anticipated an adjusted profit of $3.45 per share.
For the fourth quarter, HP expects adjusted profit per share to range from 89 cents to 99 cents, with the midpoint falling below the LSEG estimate of 95 cents. The company reported a 2.4% increase in third-quarter revenue to $13.52 billion, surpassing analysts’ expectations of $13.38 billion.
Additionally, HP has increased its share repurchase authorization to $10 billion.
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