HP’s quarterly profit fell 55%
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The American IT company HP has published reporting for the first quarter of fiscal year 2023 ended January. Key financial indicators were worse than in the previous quarter and in the first quarter of 2022. So, HP’s net revenue fell by 18.8% and amounted to $13.8 billion, and, according to Refinitiv, this is the most significant drop in this indicator since 2016. Net profit fell by 55% to $500 million, operating margin – by 2.5 percentage points, to 5.5%, free cash flow – by 114% to $200 million.
HP CEO Enrique Lores said supply chain issues, lower consumer spending on electronics due to rising inflation, and a “slowdown” in orders from companies are behind the drop in numbers, as companies are now “becoming more careful about how they manage the budgets. Meanwhile, the maker of PCs, printers, copiers, tablets and the like is optimistic for the coming quarters and for the entire fiscal year 2023.
According to HP management, the removal of severe pandemic restrictions in China, which is a key market for the American company, and also the main supplier of components for HP products, will play a significant role in this. As HP expects, according to the results of the current fiscal year, earnings per share will be $3.2-3.6, and free cash flow will be in the range of $3 billion to $3.5 billion.
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