HP boosts annual profit outlook amid sustained PC demand

New York

HP INC increased its full-year earnings outlook on strong personal computer demand while saying it would take a hit to quarterly profit as a result of global sanctions on Russia.

The company said annual profit will be as much as US$4.38 per share, an increase of 11 cents a share from the forecast issued in November.

Earnings, excluding some items, will be as high as US$1.08 per share in the current period ending in April, the company said on Monday (Feb 28) in a statement.

The quarterly outlook includes an impact of three cents due to the global sanctions against Russia, chief executive officer Enrique Lores said in an interview.

Driving that rosy outlook is an increased demand for PCs, a market that HP now expects to be worth as much as US$560 billion by 2024, as well as continued success in segments like gaming and 3D printing.

"The market is now significantly bigger than it was before the pandemic," Lores said.

"We don't think we'll continue to grow at the 40 per cent annual growth rates that we have seen in the last two years, but the new market size is sustainable."

Still, supply chain challenges will continue to affect HP's printing business through the remainder of the year, he said.

The Palo Alto, California-based company will work through a growing order backlog that is expected to remain elevated through 2022, Lores said.

Fiscal first-quarter revenue increased 8.8 per cent to US$17 billion, compared with analysts' average estimate of US$16.5 billion, according to data compiled by Bloomberg.

Personal systems sales, which includes PCs, jumped 15 per cent to US$12.2 billion. Printing revenue dipped 4 per cent to US$4.8 billion, in the period ended Jan 31.

HP shares have declined 8.8 this year, closing at US$34.36 in New York on Monday. BLOOMBERG