HP Inc., which houses the former Hewlett-Packard Co.'s legacy hardware business, reported lower-than-expected quarterly revenue as it struggles with weak demand for personal computers and printers. HP Inc.'s shares were down 2 percent at 11.96 in extended trading on Wednesday. Revenue in the company's personal systems business fell 9.9 percent in the second quarter ended April 30 from a year earlier, while revenue declined 15.8 percent in the printing division. Printer demand has been hurt as corporate customers cut printing costs and consumers shift to mobile devices. HP Inc. forecast an adjusted profit of 37-40 cents per share for its third quarter.
The consumer arm of the newly reshuffled Hewlett-Packard has announced plans to cut up to 4,000 jobs in the next three to four years. Speaking at a conference in New York, HP Inc president and CEO Dion Weisler said the 3,000-plus cuts will affect staff in departments throughout the company. "Although our markets remain very challenged, we are committed to innovating in the core and continue to see long-term growth opportunities in commercial mobility and services, the disruption of the A3 copier market, and the digitisation of graphics and manufacturing through our leading 3D printing solutions," Weisler said in a financial outlook statement. "We are confident in our strategy and believe it will continue to produce reliable returns and cash flow, while also enabling HP to invest in differentiated innovation and long-term growth." According to CNBC, the restructuring plan is expected to save HP between 200 million and 300 million from the start of fiscal 2020, with the board also reportedly expecting to outlay about 350 million to 500 million in restructuring costs and other related charges.
By focusing on sleeker designs and high-performance game machines, HP managed to boost revenue and gobble market share from smaller competitors even as the PC market shrank. The bet has paid off so far, sending HP's stock up 77% since the company's split. With the stagnant PC market largely condensed into a handful of giants, the questions for HP are how long it can make the formula last and what comes next. HP is set to report fiscal second-quarter results on May 29. Analysts surveyed by S&P Global Market Intelligence expect revenue rose 10% to $13.58 billion, with adjusted per-share earnings up 20% at 48 cents.