HP Inc shares fell on Thursday after it offered little insight into how it will overcome the globally depressed market for computers and printers as it released earnings that were just in line with analysts’ estimates.
In its first full quarterly report as a standalone company, HP executives spoke of difficult markets and said job cuts announced earlier need to be accelerated. The stock declined 4.4 percent to US$10.34 at the close in New York, making it the third-worst performer in the Standard & Poor’s 500 Index. The shares have dropped 13 percent this year.
Profit before certain items in the second quarter, which ends in April, will be between US$0.35 and US$0.40 a share, HP said on Wednesday in a statement.
That compares with an average estimate of US$0.39, according to data compiled by Bloomberg.
In an interview, HP chief executive officer Dion Weisleris said the company would need to accelerate a plan announced last year to eliminate about 3,000 positions over three years.
Instead, the reductions will be completed this fiscal year.
“We’re operating in markets that are challenged,” Weisler said. “We’re operating in markets that are consolidating in many cases — and that we see opportunity to outpace our competitors. We see opportunity to take costs out of our system.”
HP, the smaller of the two units of the former company based on market valuation, said that sales during the quarter ended last month were US$12.2 billion, meeting the average estimate.
Adjusted profit was US$0.36 a share, hitting the number projected by analysts.
For the fiscal year, the company expects adjusted earnings of between US$1.59 and US$1.69 a share, compared with estimates of US$1.60 and in line with the company’s forecast made in November last year.
HP is confronted with a changing landscape in the struggling PC industry. Vaio Corp, the PC maker spun off from Sony Corp in 2014, is closing in on a three-way merger with rivals to create a producer that can dominate Japan and weather a shrinking global market. Dell Inc, another key competitor in personal computers, is set to add more storage products with a US$67 billion merger with EMC Corp.
Sales in HP’s personal systems, which include desktops and laptops, fell 13 percent from a year earlier, while revenue from the printer unit declined 17 percent.
The printer industry also is going through difficulties as businesses and consumers opt more for digital devices to access information instead of relying on paper documents.
Lexmark International Inc, which said this week it is trimming staff over the next year, is exploring strategic alternatives that could include a partial sale to some of its rivals.
“We’ve got to get our cost structure, our non-revenue generating cost structure down to operate in what we’re calling the new normal,” chief financial officer Catherine Lesjak said during a call with analysts. “This is the environment in which we have to win and succeed.”
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