Weak PC Sales Weigh Down Hewlett-Packard Revenues

Hewlett-Packard’s revenues fell by 9.5 percent in the last quarter compared to the same period last year, to $25.7 billion, due to weakening sales of personal computers (PC) and demand for the company’s services.

 According to a business report released on Tuesday, HP’s net profit for the last quarter, ending October 31, was $1.32 billion, down from $1.33 billion in the same period last year. The world’s second-largest personal computer manufacturer has experienced a revenue decline in 16 of the last 17 quarters, primarily due to falling PC sales. In the last quarter, revenues from PC and printer sales fell by about 14 percent year-on-year.

Global PC sales have been declining for some time, and the recent launch of Microsoft’s new Windows 10 operating system has so far failed to reverse this trend.

The decline in HP’s revenues is also a result of the strengthening dollar, which has led to falling revenues from markets outside the U.S., where the company generates nearly two-thirds of its total revenue. In the enterprise services division, HP’s revenues fell by 9 percent year-on-year in the last quarter.

The report released yesterday was the last comprehensive one, as Hewlett-Packard is splitting into two companies this month. One, to be called HP Inc, will focus on the production of computers and printers, while the other, Hewlett-Packard Enterprise or HPE, will target the fast-growing area of hardware and services for enterprises.

This 76-year-old company is seeking to redirect its business towards computer equipment, services, and network systems for enterprises, while reducing its dependence on PC sales, as consumers are buying fewer PCs and more smartphones and tablets. The company’s split is part of a radical multi-year restructuring plan that includes sharp cost reductions and the elimination of more than 50,000 jobs. At the end of last year, HP had over 300,000 employees worldwide.