HP Inc (NYSE:HPQ) shares slid 8% to $28.90 in late-morning trading on Wednesday after the information technology company posted mixed third-quarter 2023 financial results and issued softer-than-expected 4Q guidance.
Inflation and global economic uncertainty has sparked a more than year-long slump in personal computer (PC) sales and has led to increased inventory across the supply chain.
PC shipments, including desktops, notebooks and workstations, to China have declined 19% in the past few months as the Asian region remains cautious about spending on IT, according to analysis firm Canalys, Reuters reported.
"We don't see it (a recovery in China) happening anytime soon. And at this point, we are not building that recovery in any of our plans," HP CEO Enrique Lores said.
Weaker PC sales also weighed on Apple Inc (NASDAQ:AAPL)’s recent results, after the consumer electronics giant revealed a 7.3% decline in sales of its Macs, while Lenovo, Dell, Acer, and Asus all saw shipment declines in 2Q.
Tech researcher International Data Corporation (IDC), meanwhile, projected that PC shipments will increase by 3.7% next year to 261.4 million, Yahoo Finance reported.
HP reported 3Q revenue of $13.2 billion, down 10% year-over-year and short of the $13.4 billion expected by analysts. Its adjusted earnings per share for the period of $0.86 was in line with the Wall Street consensus forecast.
HP, however, stated that it remains on track to deliver 40% of its three-year cost savings target by the end of the fiscal year.
Shares of HP have gained 9% year to date.
Contact Sean at sean@proactiveinvestors.com