HP Sales Beat Expectations As PCs Return To Growth

HP on Wednesday reported revenues that beat analysts’ expectations as it experienced its first rise in PC sales in two years, following a two-year post-pandemic slump.

HP’s personal systems unit, which includes desktops and notebooks, showed a 3 percent revenue increase over the previous year to $8.43 billion (£6.6bn) in the fiscal second quarter, compared to the $8.28bn analysts expected.

The rise was due to a 6 percent increase in commercial sales, while consumer sales continued to decline, dropping 3 percent to $2.18bn.

The unit had shown year-on-year declines since May 2022 after HP, like many computer makers, benefited from a surge in computer sales during Covid-19 lockdowns in 2020 and 2021.

Return to growth

HP said education customers drove sales in the second quarter as schools upgraded their systems after a nearly two-year pause.

Analysts have predicted a return to growth for the PC market this year, due to an ageing installed base, pressure to migrate to Windows 11 and the integration of AI capabilities boosted by chips designed to handle AI tasks.

IDC found the PC market returned to a modest 1.5 percent growth in the first quarter of 2024 after two years of declines, in part due to comparison with a low level of sales in the first quarter of 2023, when sales declined 28.7 to “the lowest point in PC history”.

So-called AI PCs, such as those HP unveiled last week at a Microsoft event, are expected to make up about 10 percent of total shipments in the second half of this year, rising to about 50 percent three years after launch, HP said.

AI boost

HP’s printer unit sales declined 8 percent to $4.37bn while in the period ended 30 April total sales declined less than 1 percent to $12.8bn, higher than analysts’ projected $12.6bn.

Shares in HP have risen about 9 percent this year, far short of those of Dell Technologies, which has seen its shares more than double this year over excitement around its AI-focused servers.