Finance
HP cuts annual profit forecast as tariffs weigh on demand, shares fall
Published by Global Banking & Finance Review®
Posted on May 28, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 28, 2025
2 min readLast updated: January 23, 2026
HP Inc lowers its 2025 profit forecast due to tariff pressures, affecting PC demand and shares. The company shifts production to mitigate costs.
By Juby Babu
(Reuters) -HP Inc cut its annual profit forecast on Wednesday as it expects a moderation in PC market growth at a time when the global economic environment remains volatile, sending its shares down 14% in extended trading.
The uncertainty surrounding U.S. tariffs and associated inflationary pressures will negatively impact demand for personal computers in the following quarters in 2025, research firm IDC said last month.
HP is seeing the biggest cost impact in its Personal Systems segment, CFO Karen Parkhill said. "The tariff-related costs are due to both the actual cost of the tariffs, as well as the increased investment that we are making to work to offset them."
The company expects to offset the costs by the fourth quarter.
HP now expects fiscal 2025 adjusted profit between $3.00 and $3.30 per share, down from its prior forecast of $3.45 to $3.75 per share. Analysts had expected a full-year profit of $3.49 per share, according to data compiled by LSEG.
The company's second quarter was "impacted by higher-than-expected tariffs that we were not able to fully mitigate," HP CEO Enrique Lores said.
"We have recently increased production in Vietnam, Thailand, India, Mexico and the U.S., and by the end of June, we expect nearly all our products sold in North America will be built outside of China," Lores added.
For the second quarter ended April 30, HP reported revenue of $13.22 billion, compared with analysts' average estimate of $13.14 billion.
On an adjusted basis, the company earned 71 cents per share, missing estimates of 80 cents.
Sales at HP's Personal Systems segment — home to its desktop and notebook PCs — rose 7% from a year earlier, while sales at its Printing unit fell 4% in the quarter.
The PC maker forecast third-quarter adjusted profit per share between 68 cents and 80 cents, compared with estimates of 90 cents.
(Reporting by Juby Babu in Mexico City; Editing by Shounak Dasgupta)
HP now expects fiscal 2025 adjusted profit between $3.00 and $3.30 per share, down from its prior forecast of $3.45 to $3.75 per share.
The uncertainty surrounding U.S. tariffs and associated inflationary pressures will negatively impact demand for personal computers in the following quarters.
For the second quarter ended April 30, HP reported revenue of $13.22 billion, which was slightly above analysts' average estimate of $13.14 billion.
HP has recently increased production in Vietnam, Thailand, India, Mexico, and the U.S., expecting nearly all products sold in North America to be built outside of China by the end of June.
On an adjusted basis, the company earned 71 cents per share, missing estimates of 80 cents.
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