The stock of HP Inc. (HPQ) is down 8% after the computer maker reported mixed financial results for what was its Fiscal fourth quarter, and offered weak forward guidance.
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Silicon Valley-based HP Inc., which also makes printers and other computer hardware, announced earnings per share (EPS) of $0.93. That was in-line with the consensus forecast on Wall Street. Revenue for the quarter totaled $14.1 billion, which was slightly ahead of analyst estimates that called for $13.99 billion.
In terms of guidance, HP Inc. said that it expects earnings of $0.70 to $0.76 per share for the current quarter. That outlook fell short of the consensus forecast of $0.86 on Wall Street. For all of its Fiscal year 2025, the company expects earnings of $3.45 to $3.75. That compares with $3.60 a share estimated among analysts.
Sluggish PC Sales
HP Inc. is struggling with a global slump in sales of personal computers. Following a peak in 2020 and 2021 during the Covid-19 pandemic, sales of computers have declined in recent years. In this year’s third quarter, global shipments of personal computers dropped 2.4% from a year earlier to 68.8 million units, according to data from research firm IDC.
While HP Inc. and other hardware manufacturers remain optimistic about new artificial intelligence (AI) enabled personal computers, sales of those devices have not yet taken off. Personal computers that can run AI applications currently account for only 17% of all sales, according to research firm Gartner.
Is HPQ Stock a Buy?
The stock of HP Inc. has a consensus Hold rating among 13 Wall Street analysts. That rating is based on three Buy, nine Hold, and one Sell recommendations issued in the last three months. The average HPQ price target of $35.85 implies 8.31% downside risk from current levels.
