HP Inc (HPQ) saw its stock price plummet 7.79% in after-hours trading on Wednesday, following the company's disappointing second-quarter earnings report and reduced profit forecast for fiscal year 2025. The tech giant cited higher-than-expected tariff costs and moderating demand for hardware as key factors behind the sharp decline.

In its fiscal second-quarter earnings report, HP revealed adjusted earnings of 71 cents per share, falling short of Wall Street estimates of 80 cents per share. The company now expects full-year adjusted earnings between $3.00 and $3.30 per share, down from its previous forecast of $3.45 to $3.75 per share. This new guidance is significantly below analyst expectations of $3.56 per share.

CEO Enrique Lores addressed the challenges, stating, "Tariff charges were bigger and impacted more countries than we were expecting." To mitigate these pressures, HP announced plans to implement targeted price increases and accelerate efforts to shift production out of China. The company aims to have nearly all of its North American products built outside of China by the end of June, with increased production in countries such as Vietnam, Thailand, India, Mexico, and the United States.

Despite these measures, HP expects the tariff-related costs to continue impacting results until the fourth quarter. The company's outlook reflects the added costs driven by current U.S. tariffs in place and associated mitigation efforts. As the PC and printer market faces uncertainties, investors seem wary of HP's ability to navigate the challenging global trade environment in the near term.