On Tuesday, HP Inc. lowered its forecast for the year’s earnings as it struggles with a personal computer industry downturn that has lasted over a year and weak demand in China, a crucial market.

In trading after the market closed, the company’s shares in Palo Alto, California, decreased 5.2%.

The demand for consumer devices, including PCs, fell last year as a result of inflation and an unsteady global economy, which boosted inventory throughout the supply chain.

“While we expect another quarter of sequential growth in the fourth quarter, the external environment has not improved as quickly as anticipated and we are moderating our expectations as a result,” said HP’s CEO Enrique Lores.

According to analytical firm Canalys, PC exports to China, including desktops, laptops, and workstations, have decreased 19% over the past few months as the country continues to be conservative with IT investment.

“We don’t see it (a recovery in China) happening anytime soon. And at this point, we are not building that recovery in any of our plans,” Lores added.

In contrast to earlier projections of $3.30 to $3.50, HP now expects adjusted earnings per share to be in the range of $3.23 to $3.35.

According to Refinitiv data, the company’s third-quarter revenue decreased by 9.9% to $13.20 billion from analysts’ projected $13.37 billion.

However, the PC manufacturer was able to report adjusted earnings per share of 86 cents, which was in line with analysts’ expectations, thanks to a focus on cost reduction.

In addition, total costs and expenses decreased 8.6% from the prior year.

By the end of the fiscal year, the corporation will have achieved 40% of its three-year cost savings goal.

(Adapted from ThePfrint.in)