HP Inc. (HPQ) saw its stock price plummet 15.48% in after-hours trading on Wednesday following the company's announcement of a 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 outlook revision.
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, "We think that given the macro uncertainty that has been driven by the new trade situation, there is going to be an impact on demand." 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.
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