HP, a leading supplier of PCs, laptops, and printers, has released its financial report for the third quarter of fiscal year 2023, revealing a revenue of $13.2 billion. This figure reflects a notable decline of 9.9 percent compared to the same period in the previous year.
The dip in HP’s revenue is indicative of the prevailing economic conditions, which have prompted both retail customers and enterprises to tighten their belts through cost-cutting measures. As businesses and individuals navigate a shifting economic landscape, their cautious spending habits have impacted HP’s financial performance.
IDC research earlier said global PC shipments declined 13.4 percent during April-June quarter of 2023 to 61.6 million units. This was the sixth consecutive quarter of contraction brought on by macroeconomic headwinds, weak demand from both the consumer and commercial sectors, and a shift in IT budgets away from device purchases.
“Elevated channel and component inventory are dragging down the PC market,” said Jitesh Ubrani, research manager for IDC’s Mobility and Consumer Device Trackers. “Despite these issues slowly easing, many component suppliers continue to offer reduced pricing in an effort to clear their inventory though PC makers and channels are still cautious about new systems due to the reduced demand.”
HP, according to IDC report, has shipped 13.4 million units of PCs for 21.8 percent share in April-June 2023 as compared with 13.5 million units for 19.1 percent share in the same quarter in 2022.
Segment Performance for Q3 2023
Personal Systems Segment: The Personal Systems segment, encompassing PCs and laptops, reported a net revenue of $8.9 billion for the quarter. This represents an 11 percent decrease from the previous year. The operating margin for this segment stood at 6.6 percent. Notably, Consumer Personal Systems net revenue declined by 12 percent, while Commercial Personal Systems net revenue decreased by 11 percent. However, despite the revenue decline, the total number of units sold saw a 3 percent increase. Consumer Personal Systems units experienced an 8 percent surge, while Commercial Personal Systems units remained flat.
Printing Segment: In the Printing segment, HP reported a net revenue of $4.3 billion for the quarter, indicating a 7 percent decrease year over year. The operating margin for this segment was 18.6 percent. Consumer Printing net revenue experienced a substantial drop of 28 percent, while Commercial Printing net revenue declined by 6 percent. Additionally, Supplies net revenue saw a 2 percent decrease. Hardware units in total recorded a significant drop of 19 percent, with Consumer Printing units down by 20 percent and Commercial Printing units down by 8 percent.
CEO’s Perspective and Future Outlook: Enrique Lores, the President and CEO of HP, shared insights into the company’s performance and future expectations. He acknowledged the anticipation of sequential growth in the coming quarter but noted that the external business environment had not improved as rapidly as anticipated.
In light of this, HP is adjusting its expectations. Lores expressed continued confidence in the company’s ability to drive long-term growth and value creation. He emphasized the importance of focusing on factors within their control and making consistent progress in alignment with the “Future Ready” plan.
As HP navigates the challenges presented by the current economic climate, the company’s adaptability and strategic initiatives will play a pivotal role in shaping its trajectory in the quarters to come.