HP Inc (NYSE:HPQ)’s Q1 Earnings Hurt By Weak PC and Printer Sales
HP Inc (NYSE:HPQ) is not hitting the right strides while operating as a standalone company. Its first quarter as a separate company continues to raise concerns, having failed to spark the Street on the earnings front.
Net earnings of $592 million continues to spook investors as it represents a 58% drop $1.4 billion posted last year same quarter. Total revenue came in at $12.25 billion a 12% drop from $13.86 billion posted a year earlier.
Shrinking PC and Printer Sales
The drop highlights the troubles the company is facing as the PC market continues to shrink. The company’s Personal Systems PC group registered a 13% drop in revenue that came in at $7.4 billion. HP Inc says it has not seen any stimulated demand even with the unveiling of Windows 10 OS.
The Printing business which is HP’s other core business posted revenues of $4.6 billion down from $5.6 billion a year ago. Printer sales were mostly hurt by a drop in demand as more corporate customers continue to cut printing costs while others shift to mobile devices. The company says it is adopting new innovative technologies as it looks to shrug off slowdown in the business.
HP Q2 Guidance
The PC business is on a decline as more people and corporates switch their attention to tablets and smartphones. PC’s sold in the quarter dropped by 13% from last year levels with notebook sales also dropping by 8%. Printer’s sales also came under pressure on declining demand with HP selling 20% fewer printers than it did last year. Hardware sales were also down by 23%.
Amidst the turmoil in the PC and Printing business HP Inc, says its earnings came in at 36 cents a share in line with analysts’ estimates. HP expects second quarter adjusted earnings of between 35 cents and 40 cents a share. Wall Street on average expects earnings of 39 cents a share.
Chief executive officer Dion Weisler says they are focused on executing a recently instituted strategy that focuses more on HP Inc strengths. Focusing on cost cuts as well as delivering innovations is also top of the agenda.
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