HP Inc beat first-quarter revenue estimates, driven by strength in its personal systems segment and growing demand for artificial intelligence-capable systems.
The company also said it would lay off an additional 1,000 to 2,000 employees as part of its previously announced restructuring plan. The move is expected to generate savings of about $0.3 billion in fiscal 2025.
Shares of the company, however, dipped more than 3% in extended trading after it projected second-quarter adjusted profit per share between 75 cents and 85 cents, lower than analysts’ consensus estimate of 86 cents.
PC market growth is expected to accelerate this year as the Windows 10 end-of-support deadline in October pushes hundreds of millions of PC users to refresh their devices.
Demand is also expected to surge as companies launch AI-capable PCs equipped with advanced and powerful processors designed for AI tasks.
However, worries around margins are creeping up, after U.S. President Donald Trump said on Thursday he would impose an additional 10% duty on Chinese goods on March 4 on top of the 10% tariff that he levied on February 4 on imports from China.
HP has been diversifying its supply chain, and by October-end expects more than 90% of HP products sold in North America to be built outside of China, CEO Enrique Lores said in an interview.
The PC market grew for a fifth consecutive quarter in the fourth quarter, with total shipments of desktops, notebooks and workstations rising 5% to 67.9 million units, Canalys data showed in January.
HP reported revenue of $13.5 billion for the first quarter ended January 31, above the average analyst estimate of $13.36 billion, according to data compiled by LSEG.
Net revenue for HP’s Personal Systems segment, home to its desktop and notebook PCs, rose 5% to $9.2 billion. Its commercial PS net revenue grew 10%. Reuters