HP Inc. is making small gains in what, until recently, has been a tough personal computer market.
The PC and printer giant reported its second consecutive quarter of growth on Wednesday with overall sales rising 4% year-over-year to $12.7 billion.
The HP unit that includes laptops, desktops, and tablets was the main contributor for the company’s positive quarter, with sales jumping 10% year-over-year to $8.2 billion.
HP CFO Cathie Lesjak said during a call with analysts on Wednesday that the company has “definitely seen” the PC market improve. Her perspective is backed up by several recent analyst reports as well recent comments made by Microsoft CEO Satya Nadella that have indicated that PC sales may be stabilizing after years of big declines.
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Lesjak attributed the increase in PC sales to more video gamers buying high-priced computers, an increase in consumer demand for so-called detachables (laptops that can also function as tablets), and Microsoft (MSFT) discontinuing it’s free Windows 10 operating system upgrade in July.
Despite the momentum, Lesjak warned analysts that it’s likely HP’s current quarter PC sales will have a “much higher” decline from the preceding quarter than is typical. She based her forecast on the fact that HP’s prior quarter included winter holiday sales.
Lesjak also said that HP still sees a “fair amount of uncertainty” for its PC business unit in 2017 because of the rising costs of components. She said that HP had already increased the price of some of its computers in its first quarter to make up for higher priced components and that it expects to raise prices for some others in 2017.
She described this as a “headwind” for the company, presumably because potential customers may be dissuaded by higher prices and buy cheaper computers from rivals.
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But HP Inc. CEO Dion Weisler seemed confident that the company’s PC business is “firing all cylinders” and that its recent growth wasn’t a one-time event. So far, investors seem to agree with Weisler.
HP Inc.’s shares were up (HPQ) nearly 2% to $16.50 in after-hours trading.
