HP Prints Earnings Miss, CEO Considers AI Computing and Cost-Cutting

HP Inc. ( HPQ ) posted an earnings loss for its most recent quarter, but its CEO says the tech giant is poised for better results as AI PCs ramp up and the company cuts costs.

CEO Enrique Lores told me on Yahoo Finance that the company will be more “aggressive” with cost cuts to improve profits, especially in the printing business. The cost cuts are part of a $1.6 billion plan drafted nearly a year ago.

The company’s fiscal third quarter sales were mixed.

Consumer PC sales fell 1% in the quarter, while business sales improved 8%. PC division sales rose 5%.

Similar to the previous quarter, business customers are upgrading their PCs before Microsoft ( MSFT ) ends support for Windows 10 in October 2025.

Worldwide shipments of traditional PCs in the second quarter reached 64.9 million, up 3% year-over-year, according to data from IDC. It marked the second quarter of growth after eight consecutive quarters of declines. China was the only weak spot, IDC said.

“Make no mistake, the PC market, like other technology markets, faces near-term challenges due to maturity and headwinds,” said IDC’s group vice president of global device tracking Ryan Reith.

Where HP continues to face challenges is in its printing business, amid fierce price competition and market changes such as more people working from home rather than in the office.

Print sales were down 3% year over year. Consumer print sales rose 2%, while commercial sales fell 5%.

Operating margins for the printing segment fell to 17.3 percent from 19 percent a year ago and were the main culprit behind revenue falling short of Wall Street estimates.

HP’s results follow weak revenue and cautious guidance from print rival Xerox ( XRX ).

“Demand for laser and inkjet printers remains subdued (especially in China + Europe), and this is having a negative impact on HP’s printing and home supplies business,” said Evercore ISI analyst Amit Daryanani. “We also note that aggressive pricing from peers (taking advantage of a weaker yen) presents competitive headwinds for HP.”

Rollover of earnings

• Net sales: $13.5B (+2.4% YoY) vs $13.37B Estimate

• Sales of personal systems: $9.4 billion (+5% YoY) vs. $9.1 billion estimate

• Print Sales: $4.1B (-3% YoY) vs $4.25B Estimate

• Diluted EPS: $0.83 (-3% y-o-y) vs $0.86 estimate (guidance: $0.78-$0.92)

What else caught our attention

The story continues

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