HP Shares Plummet 15%: Earnings Miss and Tariff Costs Drive Concerns for Investors

HP recently announced its second-quarter financial results, and the news has been mixed. While the revenue exceeded expectations, the earnings fell short, leading to a significant drop in their stock price—down 15%.

Here’s a quick look at the numbers:

• Earnings per share: 71 cents ( analysts expected 80 cents)
• Revenue: $13.22 billion (expected $13.14 billion)

Compared to last year, revenue went up by 3.3%, although net income dropped to $406 million from $607 million. For the upcoming third quarter, HP projects adjusted earnings between 68 to 80 cents per share, which is below analysts’ average forecast of 90 cents. They expect annual adjusted earnings in the range of $3 to $3.30, again short of the predicted $3.49.

HP attributes some of its struggles to increased costs linked to current U.S. tariffs. CEO Enrique Lores highlighted the impact of trade regulations on their financial outlook. He mentioned that the company is actively shifting production from China to other countries, including Vietnam and Mexico, aiming to adapt to these challenges. By late June, they expect most products sold in North America to be manufactured outside of China.

This shift reflects a growing trend among companies adapting to global trade policies. A recent survey revealed that 75% of manufacturers are considering relocating production to avoid tariffs and maintain competitiveness.

Social media reactions indicate mixed feelings among users, with some praising HP’s proactive measures, while others express frustration over fluctuating prices and product availability.

As HP navigates these changes, it will be interesting to see how these strategies impact their bottom line in the coming quarters. For further details on HP’s performance and future plans, you can check out the complete report by LSEG.

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