HP Inc. (HPQ) missed the mark on its latest earnings report, but CEO Enrique Lores remains confident, betting on AI-driven PCs and aggressive cost cuts to steer the company toward stronger performance.
Lores shared with Yahoo Finance that HP plans to be more “aggressive” with cost reductions, particularly in its printing division.
This move is part of a $1.6 billion savings plan initiated nearly a year ago.
The tech giant’s fiscal third-quarter results were a mixed bag.
While consumer PC sales dipped 1%, commercial sales rose 8%, boosting overall PC division revenue by 5%.
The push from commercial clients upgrading their systems ahead of Microsoft’s (MSFT) October 2025 Windows 10 deadline played a significant role.
According to IDC, global PC shipments grew 3% year-over-year in Q2, marking a second consecutive quarter of growth after eight straight quarters of decline.
However, China lagged, proving to be a weak spot in an otherwise recovering market.
“Make no mistake, the PC market, like other technology markets, faces challenges in the near term due to maturity and headwinds,” noted Ryan Reith, IDC’s group vice president of worldwide device trackers.
HP’s struggles are most evident in its printing business, which has been hit hard by fierce price competition and the shift to remote work.
Printing sales fell 3% year-over-year, with consumer printing up 2% and commercial printing down 5%.
The segment’s operating margins also dropped to 17.3%, down from 19% a year earlier, dragging earnings below Wall Street’s expectations.
HP’s results come on the heels of weak earnings and cautious forecasts from Xerox (XRX), another printing giant.
Evercore ISI analyst Amit Daryanani highlighted that sluggish demand for printers, especially in China and Europe, coupled with aggressive pricing from competitors exploiting a weaker Yen, is creating stiff competition for HP in the printing business.
Following the earnings report, HP shares slid 3% in after-hours trading.
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