Investing.com — Shares of HP Inc (NYSE:) saw their shares rise sharply at the market open Thursday after the company saw signs of green shoots in demand for personal computers (PCs).
The company posted quarterly net sales of $12.8 billion – a slight decline of 0.8% from the same period last year, but higher than Wall Street forecasts of $12.59 billion. Adjusted earnings per share (EPS) came in at $0.82, versus expectations of $0.81.
Sales at HP Inc’s Personal Systems (PS) division, which houses its core personal computing (PC) desktop and notebook products, rose 3.1% to $8.43 billion, beating estimates of $8.28 billion were surpassed. The result also helped offset weakness in the Printing segment, which analysts at Goldman Sachs linked to a weak Chinese market and increased competition.
Chief Executive Enrique Lores said: “As the market recovers and becomes new [artificial intelligence] PCs are introduced, we are well positioned to drive profitable growth across our business.”
HPQ shares rose more than 12% after the opening bell.
Goldman Sachs analysts predicted that while AI PCs are unlikely to make a “material contribution” to HP Inc’s full-year 2024 returns, they will eventually cause an increase in average selling prices of “5-10 percentage points”.
Elsewhere, analysts at TD Cowen raised their target price for HPQ from $30 to $32, citing “stimulating” growth in the company’s PS division, driven by “new AI PCs and the broader Win 11 refresh cycle.”
“Despite still weak demand in the printing sector, healthy margins enable the unchanged FY24 FCF target and capital return plans. AI PC price premium of 5-10% is also positive,” she added.
Looking ahead, HP Inc forecast third-quarter adjusted earnings per share between $0.78 and $0.92. For the full year, the company expects adjusted earnings per share of $3.30 to $3.60, slightly narrowing the range of its previous forecast of $3.25 to $3.65. Free cash flow guidance remained unchanged at $3.1 billion to $3.6 billion.
Oliver Gray contributed to this report.
