HP Shares Fall as Doubt Mounts Over Ability to Keep Growing

HP shares tumbled the most in a year, signaling skepticism that the world’s biggest maker of personal computers can sustain the robust growth rate of the past year, according to Bloomberg.

The company reported that sales rose for the fifth consecutive quarter. But there is lingering investor doubt about the growth potential of its core PC and printer businesses, analysts are predicting stagnant sales in 2018 and 2019. Revenue climbed 11 percent in the three months through October.

It will be hard to maintain that level of growth over the coming quarters, CFO Catherine Lesjak told analysts. “The compares are tougher, we know that,“ she said. The shares fell 5 percent at the close Wednesday in New York, the biggest single-day decline since Nov. 23, 2016.

CEO Dion Weisler is facing the prospect of lower profitability at the printer division, following the $1 billion acquisition of Samsung’s printer arm earlier this month. The former Samsung unit generates a lower proportion of revenue from the more lucrative supply of printer cartridges than HP currently does, making it harder to reach the print division’s profitability target of between 16 percent and 18 percent of revenue. The acquisition is unlikely to contribute to profit growth until the second half of the 2018 fiscal year, which started Nov. 1.