California-based technology company HP Inc (HPQ.N) reported disappointing second-quarter revenue results on Tuesday, failing to meet Wall Street’s expectations.

The company’s shares declined nearly 3% in after-hours trading as customers affected by inflationary pressures spent less on personal computers, impacting HP’s sales. The decline in demand for PCs has been observed across the industry, affecting other major players like Lenovo (0992.HK) and Dell Technologies Inc (DELL.N).

The COVID-19 pandemic initially fueled a surge in demand for laptops and other electronic devices as remote work and virtual learning became the norm. However, recent data from research firm IDC reveals that global PC shipments plummeted by nearly 30% in January-March, dropping to levels lower than before the pandemic.

Within HP’s business segments, the Personal Systems division, which includes desktop and notebook PCs, experienced a significant drop in sales, declining by 29% in the reported quarter. The company’s printing segment also recorded a 5% decrease in sales. These declines further contributed to the company’s overall revenue shortfall.

Despite the disappointing results, HP remains optimistic about the future. In an interview with Reuters, CEO Enrique Lores stated that the demand, especially on the consumer side, is expected to pick up in the year’s second half. HP anticipates higher revenue in the second half, although the year-on-year comparison will still be negative.

To reflect its improved outlook, HP revised its annual adjusted profit forecast. The company now expects to achieve an adjusted profit between $3.30 and $3.50 per share, compared to the previously forecasted range of $3.20 to $3.60 per share.

In terms of financial figures, HP reported second-quarter revenue of $12.91 billion, falling short of analysts’ expectations of $13.07 billion, according to Refinitiv data. However, on an adjusted basis, the company earned 80 cents per share, surpassing the projected earnings of 76 cents per share.

As HP looks ahead to the year’s second half, it remains determined to navigate the challenges posed by declining PC demand, inflationary pressures, and the overall economic environment. The company will closely monitor market conditions and consumer behavior to adapt its strategies and continue delivering innovative products and services to meet evolving customer needs.