HP Inc. announced that Bruce Broussard, a board member since 2021, will serve as interim chief executive officer effective immediately. The change follows the resignation of Enrique Lores, who stepped down as president and CEO and was simultaneously appointed as the new chief executive officer of PayPal. The appointment of Broussard, who most recently led Humana Inc. as president and CEO for over a decade, is intended to provide continuity as HP pursues its “Future of Work” strategy, which emphasizes AI‑enabled personal systems and the preservation of cash flow from its printing segment.
HP reaffirmed its financial outlook for the first quarter and full fiscal year 2026. Management projected a GAAP earnings per share of $0.58‑$0.66 and a non‑GAAP EPS of $0.73‑$0.81 for Q1, while the full‑year guidance remains at $2.47‑$2.77 GAAP and $2.90‑$3.20 non‑GAAP. The company also reiterated a free‑cash‑flow range of $2.8‑$3.0 billion for FY 2026. The guidance is conservative relative to analyst expectations—$0.73‑$0.81 versus a consensus of $0.77 for Q1 and $2.90‑$3.20 versus a consensus of $3.56 for the year—reflecting management’s caution amid macro‑economic headwinds and the uncertainty surrounding the leadership transition.
Segment performance highlights a mixed picture. Personal Systems revenue rose 5% year‑over‑year to $7.2 billion, driven by a 7% increase in the AI‑enabled PC sub‑segment, while the printing segment declined 2% to $1.9 billion, reflecting continued softness in the commercial printing market. Operating margin contracted from 8.4% in Q1 FY 2024 to 7.3% in Q1 FY 2025, largely due to rising memory costs that eroded profitability in the PC business and a shift toward lower‑margin AI PCs. The company’s cost‑control initiatives have mitigated some of the margin pressure, but the mix shift toward higher‑volume, lower‑margin products continues to weigh on profitability.
The market reacted sharply to the leadership change. HP’s shares fell more than 6% in pre‑market trading on the announcement day, and several major banks—including Bank of America, Morgan Stanley, Citigroup, Barclays, and Goldman Sachs—downgraded the stock to “Underperform” and cut their price targets. The downgrades were driven by concerns over the sudden CEO resignation, the potential for strategic delays, and the company’s conservative guidance in the face of persistent PC demand weakness and memory‑cost inflation.
Chip Bergh, chairman of the board, expressed confidence in Broussard’s ability to steer the company through the transition. “Bruce brings a deep understanding of HP’s operations and a proven track record of leading large, complex organizations,” Bergh said. He added that the board remains committed to the “Future of Work” vision and that the interim period will focus on maintaining momentum in AI‑enabled product development while safeguarding cash flow from the printing business.
The leadership transition underscores the importance of stable governance for HP’s long‑term strategy. While the interim appointment is intended to preserve continuity, the market’s reaction highlights the uncertainty investors feel about the company’s ability to navigate the current macro‑environment and the evolving PC and printing markets. The company’s focus on AI‑enabled personal systems and its commitment to cost discipline will be closely watched as indicators of its capacity to sustain growth and profitability in a challenging landscape.
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