HP Inc said on Tuesday its forecasts for the second-quarter profit remained on track as a recovery of demand in China lifted sentiments. The PC and printing giant also kept its full-year earnings target on course although the January-quarter results showed revenue fell 19 percent compared with the same quarter a year ago.
"China is evolving into the most positive scenarios," HP Inc CEO Enrique Lores said, according to Reuters. HP had suffered setbacks in China last year as supply chain disruptions and a dip in demand caused by continued Covid-19 restrictions. Now, the China reopening has triggered fresh demand for hardware.
According to HP forecasts, adjusted per share earnings in the second-quarter will be between 73 cents and 83 cents. This topped analysts' average estimate of 76 cents. The company also kept its adjusted profit target of $3.20 to $3.60 per share. HP shares rose 2 percent following the sanguine forecast.
First Quarter Results
However, in the fiscal first quarter, HP's revenue plunged nearly 19 percent to $13.8 billion. This marked the steepest quarterly fall in revenue since 2016. The company said first-quarter sales fell by nearly 19 percent as well amid a macroeconomic crisis that marked a spending lull.
"I think the decline of sales is really driven by the situation that we see in the market driven by the macroeconomy," Enrique Lores told Yahoo Finance.
While printer sales fell 5 percent from a year ago, consumer and commercial PC sales fell 36 percent and 18 percent, respectively.