HP reported a mixed third quarter with sales lower than expected. CEO Enrique Lores said, "the external environment has not improved as quickly as anticipated, and we are moderating our expectations as a result."

The company reported third quarter revenue of $13.2 billion, down 10% from a year ago. HP reported earnings of 76 cents a share with non-GAAP earnings of 86 cents a share.

Wall Street was looking for HP to post earnings of 86 cents a share on revenue of $13.4 billion. The PC market malaise is expected to continue into 2024. According to IDC, 2023 PC shipments are forecast to decline 13.7% year over year to 252 million units.

IDC is expecting the PC market to grow again in 2024 but remain below 2019 pre-pandemic levels.

HP's results highlight how the PC and printing markets are bouncing along the bottom. On a conference call with analysts, Lores' message was that HP was controlling what it could. "We remain on track to deliver our cost savings targets," said Lores. 

Looking forward, Lores said that the PC market will get a boost from systems to train models locally. These low-latency systems will be "a significant driver of PC refresh" in 2024 and beyond. Lores added that HP will be outlining its innovation for more high-powered systems in the weeks to come. 

The company said personal systems revenue was $8.9 billion, down 11% from a year ago. Consumer revenue was down 12% and commercial sales fell 11%. HP delivered a personal systems operating profit of $592 million in the third quarter.

The printing business was also down from a year ago. HP said printing revenue was $4.3 billion, down 7% from a year ago. Consumer revenue was down 28% and commercial sales fell 6% from a year ago.

As for the outlook, HP projected non-GAAP earnings between 85 cents a share to 97 cents a share. For fiscal 2023, HP projected non-GAAP earnings to be $3.23 a share to $3.35 a share. Lores said HP expects pricing pressure and weak demand in China. "We view this moment as an opportunity to double down on the things we control," said Lores, who added HP will look for more cost savings. "We know how to manage the business strategically."

Here's a look at what HP outlined as growth areas.

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