HP Inc. saw “very strong demand on the commercial side” in its PC business during its most recent quarter, HP CEO Enrique Lores said Thursday, which has returned the company’s commercial personal systems business to growth for the first time in more than a year.
The company also reported significant growth in its consumer PC business, and in both its commercial and consumer print businesses, for the second quarter of its fiscal 2021, ended April 30. All in all, HP’s revenue for the quarter jumped 27.3 percent from the same period a year earlier, to reach US$15.9 billion—beating the Wall Street analyst consensus estimate by US$900 million.
For HP’s fiscal Q2, net revenue for the company’s commercial personal systems business climbed 10 percent year-over-year. That marked the first time the business had seen growth since the arrival of the COVID-19 pandemic in North America. HP’s commercial personal systems business last saw growth during the first quarter of its fiscal 2020, ended 31 January 2020.
This rebound in growth on commercial PC is not expected to be short-lived, either, as workers continue returning to offices, Lores said on Thursday.
“What we said a quarter ago [is that] we were expecting the commercial PC business to start to recover in the second half of the year. And we are seeing that happening,” Lores said during a call with reporters and analysts, in response to a question from CRN USA.
“As offices reopen, and companies try to bring back their employees, they are realizing they need to invest in office equipment—in PCs,” Lores said. “And this is starting to happen. So I think the next quarters are going to be very solid quarters for our commercial partners.”
HP also kept up the momentum for its consumer personal systems business during its latest quarter, with net revenue in the segment surging 72 percent from the same period a year ago. Revenue for Chromebook devices—which have remained in high demand for enabling remote K-12 education—is split between HP’s consumer and commercial personal systems segments.
Overall HP personal systems revenue rose 27 percent during the quarter from the same period a year earlier, to US$10.56 billion. Sales of notebook units soared 63 percent, while desktop units fell 5 percent, year-over-year.
While increased office usage is driving interest in commercial PC refreshes, HP also expects continued demand for devices that can be used for work-from-home. “We see the future being hybrid,” Lores said.
Revenue grew at a similarly brisk pace for HP’s printing business during the latest quarter, with a 28-percent increase in printing net revenue from the year before, to reach US$5.32 billion.
Commercial net revenue for printing hardware during the quarter was up 34 percent—also a reversal from the declines of preceding quarters—while supplies net revenue climbed 17 percent, year-over-year. Commercial unit sales rose 22 percent, HP reported.
Consumer net revenue for printing hardware saw the biggest growth of any sub-segment for HP during its fiscal second quarter, spiking 77 percent from a year earlier, the company disclosed.
“This was a great quarter for PCs, but it was an even better quarter for printers. And we see the resurgence [continuing],” Lores said Thursday. “The diverse portfolio that we have [in print] is proving to be a very strong advantage.”
HP’s printing subscriptions and services also enjoyed an expansion during the latest quarter, CFO Marie Myers said during the company’s quarterly call with analysts on Thursday.
That included growth in managed print services revenue and a 7-percent increase in Instant Ink subscriptions, quarter-over-quarter, to reach 9.7 million subscriptions in total, Myers said.
Looking ahead in print, “we expect strong demand in consumer and continued improvement in commercial as offices reopen,” she said.
The industry-wide shortage of processors and other components is expected to have an impact on HP’s businesses, but not enough of an impact to halt the overall growth, Lores said during the quarterly call with analysts.
“We expect supply constraints to continuous at least to the end of 2021,” Lores said. “We have taken actions to navigate through the challenges, enabling us to deliver strong results and increase our outlook for the second half.”
HP’s profits have also been increasing amid the growth of its PC and print businesses. The company’s non-GAAP net earnings during the fiscal second quarter rose to US$1.16 billion, or 93 cents per diluted share, up from US$741 million, or 51 cents per diluted share, during the same period a year earlier.