HP Inc’s shares declined nearly 10% in pre-market trading to $27.49 on Thursday after the company reported fiscal third-quarter results that missed investor expectations despite revenue and earnings beats.
The Palo Alto-based technology company posted revenue of $15.7 billion for the quarter, up 12.5% year-over-year and exceeding the consensus estimate of approximately $14.34 billion. Adjusted earnings per share reached $0.83, surpassing the estimated $0.66. However, both figures included a $0.11 per share benefit from tariff refunds, which masked underlying performance.
PC unit volume fell 16% year-over-year, indicating that revenue growth was driven primarily by pricing and a shift toward higher-margin products rather than increased demand. Personal Systems operating margin narrowed to 4.6% due to elevated memory and storage costs, a trend management indicated may persist into the fourth quarter.
For the current quarter, HP guided adjusted EPS to a range of $0.69 to $0.79, which narrowly exceeded the $0.67 consensus estimate. The outlook embeds an estimated $0.08 per share benefit from tariff refunds; excluding this impact, the midpoint of guidance would fall below market expectations.
The broader market context did not align with HP’s decline, as the S&P 500 rose 0.5% and the Nasdaq advanced 1.1% following strong earnings from a major artificial intelligence chip manufacturer. Insider activity also drew attention, with net selling by executives over the past 12 months and no recorded purchases prior to the earnings release.
HP’s stock performance reflected investor concerns over margin pressures and cautious guidance despite the revenue and earnings outperformance in the quarter.
