Sluggish PC, printer sales push HP profit forecast lower

The bleak sales volume on personal computers (PCs) and printers propelled HP Inc to lower profit forecast below the market expectations for the first quarter 2016. The company sees adverse conditions to continue in next few quarters as well. Hewlett-Packard Co witnessed drop in total revenues in five quarters in a row.
The latest quarterly numbers are last for the technology giant Hewlett-Packard Co, which has been split into two different entities. HP Inc and Hewlett Packard Enterprise Co (HPE) will begin to report separately. HP Inc lowered adjusted profit forecast for 2016 owing to bleak sales volume.

HP Inc, which holds former Hewlett-Packard Co's legacy printer and PC business, forecasts adjusted profit for the first quarter below market prediction owing to weak sales of printers and PCs. Dion Weisler, Chief Executive, HP Inc, said: "Looking ahead, we expect the PC market to remain challenged for more quarters to come."

As per Reuters' report, PC sales are sluggish globally and latest Windows 10 also failed to boost the segment. Headed by Meg Whitman, Hewlett Packard Enterprise Co (HPE) keeps its adjusted profit forecast for 2015 year. HP Inc's stock dropped 7.1 percent, while HPE share rose 2.3 percent.

Revenues from HP's personal computer and printer businesses dropped 14 percent during the fourth quarter ending October 2015. Hewlett-Packard Co's total revenues fell for fifth consecutive quarter.

Hewlett-Packard's revenues dropped 9.5 percent to $25.71 billion in the fourth quarter ending October 2015. The net income eased from $1.33 billion to $1.32 billion during the quarter. Profit per share rose to 73 cents from 70 cents owing to fewer shares outstanding.

Hewlett Packard Enterprise Co (HPE) is registering encouraging growth rate and maintained its full-year profit forecast in the range of $1.85 per share to $1.95 per share.

HP Inc predicts the adjusted profit for full-year in the range of $.59-$1.69 per share. HPE's stock fell over seven percent since its debut on 2 November 2015. HP Inc shares rose over 20 percent and were trading at $14.64.

The 76-year-old technology company has been suffering from market competition and struggling to keep pace with new technologies and trends. With consumers switching over to smart phones and tablets, the sales of PCs slipped into pressure. The business data is also moving towards internet-based data management from the conventional data storage. This is also impacting the company severely.

After the split on 1 November 2015, HP Inc will focus on printing and personal computers, while Hewlett Packard Enterprise will handle business software and the cloud.