CEO says artificial-intelligence PCs could make up 10% of shipments in second half of fiscal year
HP Inc. sees its business starting to stabilize and is looking ahead to more growth in the market for artificial-intelligence personal computers.
While HP’s HPQ, -1.03% revenue dropped about 1% to $12.8 billion for the fiscal second quarter, that was the fourth quarter in a row in which the pace of declines got smaller. Revenue also beat the consensus view, which was for $12.61 billion.
Personal-systems revenue was up 3% from a year before to $8.4 billion, while analysts tracked by FactSet were looking for $8.3 billion. Printing revenue fell 8% to $4.4 billion, about flat with the consensus view.
Chief Executive Enrique Lores said on a media call that the company expects stabilization of the printer business in looking to the second half of the fiscal year, in part due to comparisons with the year-ago period.
In PCs, Lores is upbeat about the potential in AI-enabled devices. Those could make up 10% of shipments in the second half of this fiscal year, he said.
“Because of the adoption cycle, probably this will be slightly heavier on the consumer side,” he said. “But this is just because of the length of the cycles” for commercial customers, who “need to evaluate them before they will be buying in large quantities.”
Over time, he expects commercial to represent a larger portion of AI PC shipments.
As it stands, the corporate refresh cycle is being driven mainly by Windows 11 and trends within a company’s installed base, he said, but he expects corporate customers to ultimately see the productivity value.
“You can really work much more productively and efficiently than before, and this will have a big impact on on our customers,” he said.
AI PCs fit into the emerging trend of more on-device AI, and companies including Microsoft Corp. have been showing off innovations related to them at conferences over the past few weeks.
For the latest quarter, HP logged net income of $607 million, or 61 cents a share, compared with net income of $1.05 billion, or $1.06 a share, in the year-prior period.
Adjusted earnings per share came in at 82 cents, up from 79 cents a year before, and a penny above the consensus view.
HP anticipates 78 cents to 92 cents in adjusted earnings per share for the fiscal third quarter, while analysts were modeling 85 cents.
“We continue to expect that the second half will be stronger than the first half,” Lores said.