During its most recent quarter, HP Inc. posted a sales drop that was steeper than the company and its investors had initially forecast, showing the loss in demand for personal computers and printers first hand.
Last fall, Hewlett-Packard Co. split into two separate companies with Hewlett Packard Enterprises focusing on hardware and software for data centres and HP Inc. focusing on releasing PCs and printers for businesses and consumers. HP Inc. reported a net income that was 38 per cent lower than what it earned during the previous quarter. It also issued a forecast for the fiscal year of 2016 that was lower than what some analysts had originally expected.
Despite the poor numbers it released, HP Inc. believes that it has been able to hit all of its financial targets so far this year. The company's CEO, Dion Weisler confirmed this belief in an interview: “Across all the areas of the business we are doing exactly what we said we would do.”
Initially HP Inc.'s stock price dropped during after hours trading but later it was able to rebound to rise by 1.3 per cent.
The market for PCs and printers has slowed but HP Inc. is continuing to follow its strategy of targeting niches where sales are increasing to help build its market share. Weisler also pointed out how his company has avoided competing for sales with other companies in areas such as low-cost PCs that have low profit margins.
HP Inc.'s revenue from its PC business decreased by 10 per cent from this time last year due mainly to a 16 per cent decrease in consumer sales and a 7 per cent decrease in commercial revenue. However the company's printer division saw its revenue decreased by an even higher 16 per cent. HP Inc.'s revenue also fell by 11 per cent to $11.59 billion.
The company and Weisler have decided to focus on innovative new products and bet that a rebound in customer demand will occur as well.
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