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HP Exceeds Revenue Projections Due To A Rebound In PC Demand

HP Exceeds Revenue Projections Due To A Rebound In PC Demand
As consumers update their systems, HP Inc.'s second-quarter sales topped Wall Street projections on Wednesday, indicating a rebound in the personal computer (PC) industry.
Similar to other PC manufacturers, HP had a spike in sales during the pandemic as people stocked up on electronic items for their homes, offices, and schools. However, the company subsequently saw a two-year sales dip. It's only now that the downturn is lifting.
After Microsoft introduced a plethora of new AI features last week that are intended to function on a new generation of PCs, HP is trying to ride the wave of advancements.
In an interview with Reuters, Chief Executive Enrique Lores stated that he anticipates that in the second half of HP's fiscal year 2024, "AI PCs" would account for around 10% of the company's PC sales.
"The AI PCs will be really more meaningful in 2025," Lores said on Wednesday.
"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."
According to Lores, revenues were driven by education clients in the second quarter as schools upgraded their systems following a nearly two-year decline in demand brought on by COVID-19.
LSEG data shows that HP reported second-quarter sales of $12.8 billion, which was higher than the average projection of $12.6 billion made by analysts.
HP's personal systems division, which includes its desktop and notebook PCs, had a 3% increase in sales during the reported quarter compared to the previous year, while its printing segment saw an 8% decline.
After previously estimating adjusted earnings to be between $3.25 and $3.65 per share, the business now projects adjusted profit for fiscal 2024 to be in the range of $3.30 to $3.60 per share. The midpoint of the full-year range was $3.45, above analyst estimates of $3.43.
The concerns associated with artificial intelligence are what keep us all up at night.
For the third quarter ending in July, it anticipates adjusted earnings per share with a midpoint of 85 cents, in line with the average forecast of 85 cents made by analysts.

Christopher J. Mitchell

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