Finance
HP warns US trade regulations, memory chip costs to weigh on annual forecasts
Published by Global Banking & Finance Review®
Posted on February 24, 2026
2 min readLast updated: February 24, 2026
Tags:technology
Quick Summary
HP said FY26 results will likely land at the low end as U.S. trade rules and soaring memory costs pressure margins. Q1 revenue grew 6.9% to $14.44B with EPS of $0.81; PCs rose 11% and printing fell 2%. Q2 EPS guided to 70–76c.
HP Flags U.S. Trade Rules and Memory Costs as Drags on 2026 Outlook
By Jaspreet Singh
Feb 24 (Reuters) - HP Inc said it now expects fiscal 2026 results to be at the low end of its forecasts, as the personal computer maker grapples with U.S. trade regulations and increasing costs due to the memory chip crisis.
Tariffs and Regulatory Headwinds
Like peers such as Dell, HP has also taken steps including supply chain adjustments and price increases to mitigate the impact of U.S. President Donald Trump's flip-flopping tariffs and rising memory chip prices.
Earnings Beat and Outlook Guidance
That helped it beat Wall Street estimates for first-quarter revenue and profit on Tuesday, driven by growing adoption of AI-powered personal computers and the ongoing Windows 11 upgrade cycle.
Memory Costs and Demand Squeeze
Analysts have said that memory chip squeeze could hit global demand for consumer electronics including smartphones and PCs, as rapid build-out of AI infrastructure by technology firms has drained much of the world's memory chip supply.
"With just one quarter behind us in a dynamic environment marked by increasing memory costs, we are holding our outlook for the year yet currently anticipate results to be closer to the low end of our range," HP CFO Karen Parkhill said in a statement.
IDC: 2026 Unit Shipments
Preliminary data from International Data Corporation suggests an expected low double-digit decline in unit shipments for smartphones and personal computers in 2026, said Jitesh Ubrani, research manager for IDC's Worldwide Mobile Device Trackers.
Q1 Results: Revenue and EPS
HP's first-quarter revenue rose 6.9% to $14.44 billion, beating analysts' average estimate of $13.94 billion, according to data compiled by LSEG.
Beat vs LSEG Estimates
The company's adjusted profit per share of 81 cents for the quarter ended January 31 beat estimates of 76 cents.
Revenue for the personal systems unit, which houses both consumer and commercial PCs, grew 11% to $10.25 billion. Revenue in its printing segment, which includes office-oriented printers and service offerings, fell 2% to $4.19 billion.
Q2 EPS Guidance
HP forecast second-quarter adjusted profit per share between 70 cents and 76 cents, compared with estimates of 74 cents.
(Reporting by Jaspreet Singh in Bengaluru and Juby Babu in Mexico City; Editing by Maju Samuel)
Key Takeaways
- •HP said fiscal 2026 results are tracking toward the low end of guidance due to U.S. trade rules and higher memory costs.
- •Q1 revenue rose 6.9% to $14.44B with non-GAAP EPS of $0.81, topping Wall Street estimates.
- •Personal Systems revenue grew 11% to $10.25B; Printing revenue fell 2% to $4.19B.
- •AI PC adoption and the Windows 11 upgrade cycle supported topline growth.
- •HP guided Q2 non-GAAP EPS to $0.70–$0.76 versus a $0.74 consensus estimate.
Frequently Asked Questions about HP warns US trade regulations, memory chip costs to weigh on annual forecasts
1What is the main topic?
HP warned that U.S. trade regulations and rising memory chip costs are pressuring margins and will likely push its fiscal 2026 results toward the low end of guidance.
2How did HP perform in the latest quarter?
For Q1 FY26, revenue rose 6.9% to $14.44B and non-GAAP EPS was $0.81, topping estimates. Personal Systems grew 11% to $10.25B while Printing declined 2% to $4.19B.
3What guidance did HP provide?
HP guided Q2 FY26 non-GAAP EPS to $0.70–$0.76 and maintained full-year ranges but expects results near the low end due to trade and memory cost headwinds.
4What factors supported and hurt results?
Adoption of AI PCs and the Windows 11 upgrade cycle supported sales, while higher memory costs and U.S. trade-related expenses pressured profitability, particularly offset by weakness in Printing.
