HP Inc. reported Q4 earnings that met expectations, with slight revenue misses. CEO Enrique Lores views the quarter positively, highlighting a 10% YoY growth in EPS and overall progress despite a challenging demand landscape.
Confident Outlook for PC Market in 2024:
Lores expresses confidence in HP’s profit forecast and anticipates a renewed demand in the PC market for 2024. The company aims for 5% growth in consumer PC sales, aligning with its expectations and supporting momentum into 2024.
AI PCs Set for Mid-2024 Launch:
HP plans to launch its AI PCs in mid-2024, presenting a significant growth opportunity. Lores emphasizes the difference between launch and penetration, projecting AI PCs to capture 40-60% market share three years post-launch, gradually impacting average selling prices.
AI PCs’ Capabilities and Pricing:
AI PCs are designed to run large language models locally, offering advantages in data privacy and latency-sensitive applications like gaming. Lores anticipates a 5-10% increase in average selling prices for AI PCs, emphasizing the value they bring to consumers.
Strategic Approach to Printer Business Challenges:
While the printer business faces top-line pressure, Lores outlines differentiated strategies for declining, flat, and growing segments within the print business. The goal is to maintain a flattish pre-market in the coming years and grow profitable dollars by managing each category strategically.
Maintaining Strong Margins through Cost Management:
HP’s strong operating margins are attributed to an aggressive future-ready plan addressing fixed costs. Lores affirms the company’s commitment to executing this plan, recently increasing margin expectations in the print business, driven by AI and additional actions.
AI and Innovation as Key Growth Drivers:
Looking ahead, Lores highlights innovation as a top priority for HP in 2024. While AI is a key driver, the company aims to drive innovation across various growth opportunities, including hybrid systems, service-oriented businesses, and subscriptions, improving customer experiences.
Data Privacy and AI Industry Concerns:
In response to growing regulatory concerns and industry developments, Lores reassures customers that data privacy remains a key focus for HP. The company is committed to safeguarding customer data as AI continues to evolve, aligning with its purpose-driven approach.
Excitement for AI’s Role in Future Innovations:
Despite industry dynamics, Lores expresses excitement about the rapid pace of innovation in the tech industry. He remains optimistic about AI’s positive impact, anticipating that recent industry developments, like the Microsoft drama, will not hinder HP’s ability to deliver new solutions in 2024.
Balancing Priorities for Future Growth:
Lores acknowledges the need to work on multiple fronts, including capitalizing on AI, improving costs, and enhancing the supply chain. However, he emphasizes the overarching priority of continuing to bring innovation to the market, driving growth across diverse opportunities.
In conclusion, HP’s CEO Enrique Lores provides insights into the company’s robust performance, strategic initiatives, and optimistic outlook for the future, positioning HP as a key player in the evolving landscape of AI and technology.
