By Angela Palumbo

HP stock wasn't catching a break on Thursday, even though the tariffs that have raised costs for the computer-products company have been blocked by a federal judge.

HP reported disappointing second-quarter earnings after the stock market closed on Wednesday and cut its full-year earnings guidance.

Chief Executive Enrique Lores told Barron's that the company has been focused on reducing the impacts from tariffs implemented by President Donald Trump's administration. That includes making changes to the supply chain, which raised costs and hit earnings.

"We are operating in a dynamic external environment, and within that, we are focused on what we can control," Lores said. He added that the company has accelerated plans to diversify the supply chain, and has recently "increased production in Vietnam, Thailand, India, Mexico, and the U.S., and by the end of June, we expect nearly all of our products sold in North America will be built outside of China."

Shares of HP were off 5.4% to $25.72 in midmorning trading. They were significantly underperforming the broader stock market, which was getting a boost after the U.S. Court of International Trade struck down tariffs that Trump imposed on almost every country.

Investors didn't seem convinced that a pause on Trump's tariffs would benefit HP. That might be because HP has already begun the process of moving its supply chain, and those costs won't go away now.

The Trump administration has also filed a notice to appeal the court's decision. That means tariff uncertainty will live on while the case proceeds, which could put pressure on consumers who might wait to buy nonessentials, such as PCs, until they have more clarity on what the economy will look like in the months to come.

Barron's has reached out to HP for comment.

On Wednesday, UBS analyst David Vogt wrote, "We previously expected a recovery in PC demand driven by an aging installed base and a Windows 11 refresh cycle. However, [personal systems] growth this year is likely to be more muted than previously expected given inconsistent tariff proposals leading to demand disruption across Enterprise/Consumer mkts." He cut his price target on the stock to $26 from $37 while maintaining a Neutral rating.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 29, 2025 11:46 ET (15:46 GMT)

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