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HP explained its lower guidance was based on falling demand and trade-related costs.Key Takeaways
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HP reported lower-than-expected earnings and reduced its full-year outlook because of tariff impacts.
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The PC and printer maker said quarterly results were affected by a "dynamic regulatory environment."
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HP explained the lower guidance was based on falling demand and trade-related costs.
Shares of HP Inc. (HPQ) tumbled 7% Thursday, a day after the PC and printer manufacturer posted worse-than-anticipated profit and lowered its full-year outlook as it warned of the impact of tariffs.
The company reported fiscal second-quarter adjusted earnings per share of $0.71 on revenue that rose more than 3% year-over-year to $13.22 billion. Analysts surveyed by Visible Alpha expected $0.81 and $13.10 billion, respectively.
Personal Systems sales increased 7% to $9.0 billion. Printing sales slid 4% to $4.2 billion.
CEO Enrique Lores explained that the performance was "impacted by a dynamic regulatory environment," although the company "responded quickly to accelerate the expansion of our manufacturing footprint and further reduce our cost structure." According to a transcript provided by AlphaSense, Lores added during the earnings call that additional tariff costs "could not be fully mitigated in the quarter," and that HP has "implemented price increases to help offset cost pressure."
HP Lowers Full-Year Adjusted EPS Outlook
CFO Karen Parkhill noted that because of "increased macroeconomic uncertainty," the company adjusted its outlook "to reflect moderated demand and the net impact of trade-related costs." HP now sees full-year adjusted EPS of $3.00 to $3.30, down from its earlier outlook of $3.45 to $3.75.
Following the report, JPMorgan cut its price target on the stock to $27 from $30.
HP shares have lost about 22% their value this year.
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