By Stephen Nellis
(Reuters) - HP Inc (NYSE:HPQ) beat Wall Street estimates for second-quarter revenue on Wednesday, signaling a recovery in the personal computer (PC) market as customers upgrade their systems.
Like other PC makers, HP experienced a boom in sales during the pandemic as consumers, businesses and schools stocked up on tech products and then a subsequent two-year sales slump. That slump is just now easing.
HP is hoping to ride a wave of upgrades after Microsoft (NASDAQ:MSFT) last week unveiled a bevy of new AI features designed to work on a new generation of PCs.
Chief Executive Enrique Lores told Reuters in an interview that he expects about 10% of HP's PC sales to come from such "AI PCs" in the second half of the company's fiscal 2024.
"The AI PCs will be really more meaningful in 2025," Lores said on Wednesday.
"Our (fiscal) year finishes (by the) end of October. So we will really be at the very beginning still of the next-generation AI PC space."
Lores said education customers drove sales in the second quarter, with schools upgrading their systems after a nearly two-year long demand slump following COVID-19.
HP posted second-quarter revenue of $12.8 billion, above analysts' average estimate of $12.6 billion, according to LSEG data.
In the reported quarter, sales of HP's personal systems segment — home to its desktop and notebook PCs — rose 3% from a year ago, while its printing segment posted an 8% fall.
The company now expects fiscal 2024 adjusted profit to be in the range of $3.30 to $3.60 per share, compared with its previous outlook of between $3.25 and $3.65 per share. The midpoint of the full-year range was $3.45, above analyst estimates of $3.43.
It expects adjusted profit per share with a midpoint of 85 cents in the third quarter ending in July, in line with analysts' average estimate of 85 cents.