HP cut profit forecast amid worsening PC sales

U.S. company HP lowered its annual profit forecast due to falling demand for personal computers and printers. The manufacturer's revenue fell 4.1% to $14.7 billion in the fiscal third quarter. Analysts had forecast that HP would earn $15.6 billion. Consumer sales of the company's computer division fell 20% because of falling demand for notebooks.

HP cut profit forecast amid worsening PC sales

Featured book: Entrepreneurship starting and operating a small business PDF version

HP cut its full-year earnings forecast to $4.02 per share from $4.24, compared with analysts' forecast of $4.30.

HP's earnings were affected by a decline in consumer demand that is likely to continue into the fourth quarter of 2022, Chief Executive Officer Enrique Lores said. He predicts this situation will continue for two more quarters.

Revenue at HP's personal systems unit fell 3% to $10.1 billion for the three-month period ended July 31. Despite the decline in consumer sales, the company's commercial revenue rose 7%. Total shipments were down 25 percent and notebooks were down 32 percent.

HP's expansion of its commercial PC lineup in recent months has allowed the company to protect itself from falling consumer demand. According to Lopez, HP has already begun to see a decline in demand from businesses. This circumstance has contributed to the lowering of the forecast.

Demand for PCs surged at the start of the COVID-19 pandemic. However, it began to decline as schools opened and the economy deteriorated. Worldwide PC shipments fell 13% from April to June, making the quarter the worst in more than nine years, research firm Gartner reported. HP's drop in shipments exceeded 27%.

Earlier, HP announced that it had completed its acquisition of Poly, an audio and video technology company. HP bought Poly for $3.3 billion.

Read also

Withholding TaxGeneral Accepted Accounting StandardsLetter Of IntentWhat is scarcityYear-to-dateLong-Term LiabilitiesNon-Disclosure AgreementChief Operating OfficerReturn on InvestmentChief Marketing OfficerChief Financial OfficerAsset Protection TrustChief Security OfficerCertified Financial PlannerElectronic Funds TransferLimited Liability CompanyClose of BusinessCompany FinanceCash FlowAutomated Teller MachineReturn on EquityStagnation meaningCertified Management AccountantNon-Profit OrganizationCertified Financial ManagerChief Technology OfficerProfit and Loss StatementGross Margin

Business and Finance terms

Withholding Tax General Accepted Accounting Standards Letter Of Intent Scarcity Year-to-date Long-Term Liabilities Non-Disclosure Agreement Chief Operating Officer Return on Investment Chief Marketing Officer Chief Financial Officer Asset Protection Trust Chief Security Officer Certified Financial Planner Electronic Funds Transfer Limited Liability Company Close of Business Company Finance Cash Flow Automated Teller Machine Return on Equity stagnation Certified Management Accountant Non-Profit Organization Certified Financial Manager Chief Technology Officer Profit and Loss Profit and Loss Statement Gross Margin