Takeaways
- HP sales were held back by a drop in demand, but the company predicts that AI computers could become a key source of growth.
- Revenue at HP's PC and printer divisions declined in the quarter , and overall revenues fell. 6.5% from a year ago.
- CEO Enrique Lores said AI computers could start increasing their earnings starting next year.
The slowdown in PC demand following the Pandemic-induced boom had a negative impact on HP's (HPQ) latest results, but the company hinted that it expects artificial intelligence (AI) machines could be a key driver of growth at starting next year.
HP announced that its revenue for the fourth quarter of fiscal 2023 fell 6.5% from last year to $13.8 billion. Sales at its Personal Systems unit fell 8% to $9.4 billion, and sales at the Printing division fell 3% to $4.4 billion. Earnings per share (EPS) came in at $0.97 after a loss of $0.02 the year before. Overall revenue and EPS were in line with estimates.
CEO Enrique Lores said that 2023 was a “tough market”, but said in a television interview that AI-based computers could generate significant momentum in the category and double PC growth.
He told analysts that while it was unlikely the market would immediately shift to AI PCs, “we think there will be a gradual increase in adoption,” with some gains in 2024, greater penetration in 2025 and even more in 2026. HP plans to launch its first AI PC in the second half of next year.
HP Stock (HPQ) initially slipped after the news, but recovered and rose more than 2% in intraday trading on Wednesday. They are up more than 6% so far this year.
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Source: investopedia.com