HP Misses the Work-From-Home Hookup -- Heard on the Street
By Dan Gallagher
Workers snapping up personal computers to wait out the
coronavirus pandemic at home isn't proving to be the windfall many
There were indications last month in data from IDC and Gartner
that showed a surprising drop in PC sales for the quarter ended in
March. HP Inc., ranked by IDC as the world's second-largest PC
vendor by market share, drove the point home further Wednesday with
results for its fiscal second quarter, which ended in April.
The company reported combined revenue from laptop and desktop
computers was down 7% from a year earlier--the biggest drop in four
years and sharper than Wall Street had expected. HP's shares fell
5% after the report.
Workers rushed to beef up home offices when companies began
sending them home in March. But PC supply was still limited by
production constraints at chip maker Intel Corp., according to the
Gartner and IDC reports. Those issues seem to have been sorted out.
HP said Wednesday that about half its PC sales last quarter were in
April, leaving a strong backlog of orders at the end. That suggests
better PC results in the current quarter, which ends in July.
But demand is questionable beyond that, especially as businesses
across the world begin bringing workers back. While some companies
have talked about making remote working more permanent, how that
will actually play out over the longer term remains uncertain. And
of course, sharply rising unemployment means there will be fewer
workers to equip.
That makes the coming year a tough one for HP--especially since
fewer people in the office also complicates the company's plans to
revitalize its important print-supply business. Printing simply
happens more frequently at work than at home. It also could slow
the enhanced share-buyback plan that was a centerpiece of HP's
resistance to overtures from Xerox.
The pandemic may have saved HP from that deal, but it is
complicating the company's efforts to prove the deal wasn't
Write to Dan Gallagher at firstname.lastname@example.org
(END) Dow Jones Newswires
May 28, 2020 07:14 ET (11:14 GMT)
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