HP (HPQ) printed a mixed report for investors. The computer giant reported first quarter sales fell 18.8% year over year, as consumers and businesses pulled back on spending.

HP CEO Enrique Lores said in an interview with Yahoo Finance, “I think the decline of sales is really driven by the situation that we see in the market driven by the macroeconomy.”

Printer sales were down 5% from one year prior as consumer and commercial PC sales fell 36% and 18% respectively.

However even as sales fell, the company exceeded analysts forecasts for earnings.

In the report, net sales came in at $13.8 billion vs. $14.15 billion estimated. Personal Systems Sales were $9.2 billion vs. $9.65 billion estimated. Printing Sales came in at $4.6 billion vs. a $4.49 billion estimate. Earnings per share were $0.75 vs. a $0.74 estimate.

Operating profit margins shrank 2.4% in the personal systems segment (PCs).Margins rose .8% in the printing segment.

Lores noted the company is already seeing margins lift from the various cost cutting measures which have been implemented, most notably a large series of layoffs in 2022.

Citi analyst Jim Suva said, “We are impressed with HP’s results given the dour PC trends in calendar Q1 2023 following a difficult 2022.”

Guidance was cautious for the new fiscal year after the lagging sales in the previous quarter.

The company sees EPS in a range of $0.73 to $0.83 for the second fiscal quarter. Analyst expectations for the current quarter were estimated at $0.76 per share..

The full-year earnings model was a reiteration of its previous outlook, at $3.20 to $3.60 per share. Wall Street estimates were $3.29 per share.

Lores added, “Our expectation is that the second half [of the year] will be stronger than the first half.”