HP says PC market has not been this good since XP refresh cycle

HP CEO Dion Weisler claims HP product portfolio is the best in the company's history

HP's CEO has said the firm's PC business is performing so well that it mirrors the PC boom created by the Windows XP refresh cycle, as the vendor reports its Q1 numbers.

For the three months to 31 January, GAAP net profit from continuing operations hit $600m (£481m), down six per cent annually, on GAAP net revenue which rose four per cent to $12.7bn over the same period.

In its Personal Systems business, net revenue was up 10 per cent annually, with a 3.8 per cent operating margin. Commercial net revenue jumped seven per cent and consumer net revenue was up 15 per cent. Total units grew eight per cent over the same period.

On an earnings call, transcribed by Seeking Alpha, HP CEO Dion Weisler (pictured) described the results as "exceptional". He added: "The last time we saw this level of revenue growth was in 2014, triggered by the XP refresh cycle."

Gartner figures show that in 2016, PC shipments totalled 269.7 million units, down 6.2 per cent compared with 2015, adding that the market has been in decline since 2012.

Weisler said HP is outperforming the market.

"In calendar quarter four, we beat the PC market unit growth by 8.5 points, outperforming all key competitors and achieving our highest ever worldwide market share position of 21.8 per cent," he said. "Our focus is to bring customer value and innovation to market. And because of this, we have been rewarded with share gains. This is the way we like to win. Without a doubt, our momentum can be attributed to the strongest portfolio in our history."

HP CFO Cathie Lesjak said the company has "definitely seen the PC market improve", adding that it is doing well in convertibles, detachables, premium devices and notebooks.

HP split into two in 2015, with the other half forming enterprise-focused HPE. Earlier this month at a technical conference, HPE talked up the importance of traditional hardware to its business, as opposed to new cloud and services-based offerings. HP's Weisler echoed this view and said that although the PC market is declining, there is still a huge opportunity for the firm and its partners.

"It's still a very large business," he said. "I always like to remind everyone [that] it's a $333bn market. It's very competitive and it continues to consolidate. So when we take share faster than our competitors three quarters in a row and we're executing the way we're executing but not taking share for share's sake - which we're committed to not doing - we end up with a business that's firing on all cylinders.

"More broadly, we think it's all about innovation. And as I mentioned in my initial remarks, the growth that we saw in the PC business wasn't as a result of one event. It wasn't like an XP refresh cycle. It was off the back of really strong innovation right across the portfolio, the values that the customer sees and the little sprinkles of magic that the team are adding to the product portfolio."