The post COVID-19 PC hangover has found its way to the doorsteps of computing giant HP Inc. after making stops at rival Dell and chipmakers like Intel.
HP saw fiscal third-quarter sales fall 4.1% from a year ago, pushed lower by a 32% decline in the number of notebook computer units sold.
The company fell short of analyst estimates for total sales, sales by segment, and earnings.
“So this is something that we were expecting, a slowdown in consumer, but clearly the slowdown was bigger than we were expecting,” HP CEO Enrique Lores told.
HP shares fell 6% in after-hours trading.
Amid the weak top line results, operating profit margins contracted 150 basis points in HP’s personal systems segment. Margins did rise by 230 basis points in the printing business as HP carefully managed costs and pushed through price increases.
The company is taking a cautious stance for the medium term after the challenging quarter.
For the fourth fiscal quarter, HP sees EPS in a range of $0.79 to $0.89. Analysts had estimated earnings of $1.06 per share in the current quarter.
The company slashed its full-year earnings outlook to $4.02-$4.12 a share, down from $4.24-$4.38 previously. Wall Street had been modeling for full-year earnings of $4.30 per share.
Lores said he believes the guidance reflects the caution HP is seeing in the marketplace.
On a positive note, the CEO said the back-to-school shopping season has started “strong.”