HP Shares Down On Lower Q2 Profit, Outlook

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(RTTNews) - Shares of HP Inc.(HPQ) were down 8 percent in Wednesday's extended trading after the company reported lower second-quarter profit, impacted mainly by after-tax adjustments. The company also gave outlook for the third quarter and full-year, below the Street expectations.

For the third quarter of fiscal 2025, the IT company expects earnings per share in the range of $0.57 to $0.69 and adjusted earnings per share between $0.68 and $0.80. On average, 12 analysts expect the company to post earnings of $0.84 per share in the upcoming quarter. Analysts estimates, typically exclude special items.

The company said that the adjusted EPS outlook exclude $0.11 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, certain litigation impacts, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items.

For fiscal 2025, HP expects earnings per share between $2.32 and $2.62 and adjusted earnings per share in the range of $3.00 to $3.30. On average, 15 analysts expect the company to post earnings of $3.33 per share in fiscal 2025.

The company said that the fiscal 2025 adjusted EPS estimates exclude $0.68 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, certain litigation impacts, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items.

The company said that the outlook for the next quarter and year ahead reflects the impact of the additional cost due to the current U.S. tariffs, and associated mitigations.

Karen Parkhill, Chief Financial Officer, said, "In light of the increased macroeconomic uncertainty, we have adjusted our outlook to reflect moderated demand and the net impact of trade-related costs. We are executing targeted mitigation strategies, and assuming current conditions remain, we expect to fully offset these costs by Q4."

In its latest quarter, the company reported earnings of $406 million, or $0.42 per share, lower than last year's $607 million, or $0.61 per share. Excluding items, HP reported adjusted earnings of $678 million or $0.71 per share for the period.

The company's revenue for the period rose 3.3 percent to $13.220 billion from $12.800 billion last year.

On the NYSE, the stock fell 8 percent in Wednesday's after-hours to $25.09. HPQ ended Wednesday's trading at $27.02, down 4 percent.