Shares in HP Inc. slid in after-hours trading today off a weaker-than-expected forecast as the computer maker promised to bring what it calls artificial intelligence PCs to the market in the second half of 2024.

For its fiscal fourth quarter, HP reported adjusted earnings per share of 90 cents, up from 82 cents in the same quarter of last year, on revenue of $13.8 billion, down 6% year-over-year. Earnings aligned with analysts’ expectations, while revenue was slightly lower than an expected $13.82 billion.

Free cash flow in the quarter rose 3% from a year ago, to $1.9 billion, while net earnings rose 8%, to $900 million. By division, HP saw net revenue of $9.4 billion in personal systems, which includes PCs and laptops, down 8% year-over-year. Rhe company’s printing business generated $4.4 billion in revenue, down 3%.

For its full fiscal year 2023, HP reported adjusted earnings per share of $3.28, down from $3.98 the year prior but a figure within its previous outlook of $3.23 to $3.35. Revenue in the year fell 15%, or 12% in constant currency, to $53.7 billion.

“2023 was a year of steady progress,” Enrique Lores, president and chief executive officer of HP, said in the company’s earnings release. “We executed well in a tough market and innovated in our key growth areas to finish the year with good momentum.”

For its fiscal 2024 first quarter, HP said it expected adjusted earnings per share of 76 to 86 cents, lower at the midpoint than the 86 cents analysts had predicted. For its full year, the company expects adjusted earnings per share of $3.25 to $3.65, versus an expected $3.44. HP shares fell about 3.5% in late trading.

On a call with media following the earnings release, Lores provided details on what HP plans to bring to market next year and high on that list is AI PCs.

According to CRN, Lores said that HP does not intend to brand its Intel Corp. Meteor Lake-powered computers as AI PCs, but instead plans to start marketing AI PCs in the second half of 2024 using unidentified processors from Intel Corp. and other companies. According to Lores, the AI PCs “will be a catalyst for market expansion… and that, we think, will double PC growth rates over the next few years.”

When asked if he thinks customers may hold off from buying PCs with AI capabilities until the company releases its own AI PCs, Lores said that he expects that the “penetration of AI PCs is going to increase gradually” and that “we don’t think the market will immediately shift to AI PCs.”

Photo: Don DeBold/Flickr