At $12.9 billion, sales for the second quarter of 2023 show a marked slowdown - of minus 21.7% - compared to the second quarter of 2022.

HP divides its operations into two segments: printing technologies and personal computers. The first segment, with its high margins thanks to consumables, but which accounts for only a third of sales, manages to limit the damage, falling by only 4.6%.

It's in the second segment that the problem lies, with PC sales down 29% on the previous year. The trend is clearly towards a slowdown after the peak in new equipment purchases during the pandemic, due to the "work-at-home" constraint.

Extremely competitive, the PC business has no pricing power despite HP's strong brand image - especially in the United States. On the other hand, the printing business benefits from a "razor-blade" dynamic, with, as we said, recurring sales and comfortable margins ensured by demand for consumables.

Another of HP's strengths remains the clarity of its strategy, which aims to return all profits to shareholders, through share buybacks when valuation is appropriate, or dividend distributions.

This is undoubtedly what caught Warren Buffett's eye. Berkshire, which has increased its stake in the company in recent months, has become the group's largest shareholder. True to his style, Buffett has accumulated shares at a valuation of around x8 free cash flow, i.e. a cash yield of 12.5%.

If earnings per share are to grow, it will be through the grace of share buybacks rather than through business expansion, which has long since reached a plateau in mature markets.

It's easy to see why: last year, HP generated $3.8 billion in free cash flow, but returned $5.3 billion to its shareholders, mostly through share buybacks.

In the first six months of the current year, the Group returned $618 million, this time in dividends, while its free cash flow was only $349 million.