The post-Covid-19 PC hangover has found its way to the doorstep of computer giant HP Inc. after stalling at rival Dell and chipmakers such as Intel.
HP reported sales in its fiscal third quarter fell 4.1 percent from a year earlier, weighed down by a 32 percent drop in the number of notebook PCs sold.
The company missed analysts’ estimates for total sales, segment sales and earnings.
Net sales: $14.7 billion vs. $15.6 billion
Sales of personal systems: $10.1 billion vs. $11.06 billion
Print Sales: $4.6 billion vs. $4.77 billion
Diluted EPS: $1.04 vs $1.05 (guidance: $1.03 to $1.08)
“So this is something that we expected, a delay for users, but obviously the delay was greater than we expected,” HP CEO Enrique Lores said Yahoo Finance Live.
HP shares fell 6% in after-hours trading.
Amid weak top-line results, operating profit margins contracted 150 basis points in HP’s personal systems segment. Margins rose 230 basis points in the printing business as HP carefully managed costs and pushed price increases.
The company is taking a cautious stance in the medium term after a challenging quarter.
For the fiscal fourth quarter, HP sees EPS in the range of $0.79 to $0.89. Analysts had estimated earnings of $1.06 per share for the current quarter.
The company cut its full-year earnings forecast to $4.02-$4.12 per share, down from $4.24-$4.38 previously. Wall Street was modeling full-year earnings of $4.30 per share.
Lores said he believes the guidance reflects the caution HP is seeing in the market.
On a positive note, the chief executive said the back-to-school shopping season had started “strongly”.
Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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