HP Lowers 2025 Profit Forecast as Tariffs Hit PC Demand, Shares Drop 14%

HP Inc has cut its annual profit forecast for fiscal 2025, citing the impact of U.S. tariffs and a slowdown in the personal computer market, sending its shares down 14% in extended trading.

Credit: HP

The company now expects adjusted earnings of USD 3.00 to USD 3.30 per share, down from its previous forecast of USD 3.45 to USD 3.75. Analysts had projected a full-year profit of USD 3.49 per share, according to LSEG data.

Chief Financial Officer Karen Parkhill said the biggest cost impact is being felt in HP’s Personal Systems segment. She noted that tariff-related expenses stem from both the tariffs themselves and increased investments to mitigate their effects.

HP expects to offset these costs by the fourth quarter.

Chief Executive Officer Enrique Lores said the second quarter was affected by higher-than-expected tariffs that the company could not fully mitigate. He added that HP has ramped up production in Vietnam, Thailand, India, Mexico and the United States.

By the end of June, nearly all HP products sold in North America are expected to be manufactured outside of China.

For the second quarter ended April 30, HP reported revenue of USD 13.22 billion, slightly above analysts’ average estimate of USD 13.14 billion.

Adjusted earnings for the quarter came in at 71 cents per share, missing expectations of 80 cents.

Sales in HP’s Personal Systems segment, which includes desktop and notebook PCs, rose 7% from a year earlier. However, sales in its Printing unit declined 4%.

For the third quarter, HP forecast adjusted earnings of 68 to 80 cents per share, below analysts’ estimate of 90 cents.

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• HP cut its 2025 profit forecast to USD 3.00–3.30 per share

• Shares fell 14% in extended trading

• Tariffs and inflation are weighing on PC demand

Source: REUTERS