Shares of HP Inc. (NYSE:HPQ) declined in U.S. premarket trading on Wednesday after the company reiterated its full-year profit guidance but indicated results are likely to land near the lower end of its projected range.
The printer and PC manufacturer reported earnings at a time when tightening global supplies of memory chips have increased cost pressures for hardware makers such as HP. Prices for NAND and DRAM flash memory — the two key storage technologies used in modern electronics — have more than doubled over the past six months, according to Morgan Stanley.
The results also mark the company’s first update since announcing a “company-wide initiative” focused on expanding artificial intelligence adoption, a programme that includes plans to reduce its workforce by between 4,000 and 6,000 employees.
HP posted fiscal first-quarter adjusted earnings of $0.81 per share on revenue of $14.44 billion, outperforming analyst expectations of $0.76 per share on $13.87 billion in revenue.
Revenue from the personal systems division, which includes PCs, reached $10.25 billion, representing an 11% year-on-year increase. Unit shipments rose 12% amid improving conditions in the global PC market. Data from Gartner showed worldwide PC shipments increasing 9.3% during the October–December period, with HP retaining the second-largest global market share.
The company’s printing business generated $4.19 billion in revenue, down 2% from the prior year.
“We are pleased to report a strong first quarter, highlighted by robust growth in Personal Systems, including the continued momentum in AI PCs,” interim chief executive Bruce Broussard said in a statement. Broussard assumed the interim CEO role earlier in February, replacing Enrique Lores, who departed HP to lead PayPal.
Looking ahead, HP reaffirmed its fiscal 2026 adjusted earnings per share forecast of $2.90 to $3.00. However, the midpoint of its fiscal second-quarter adjusted EPS guidance — a range of $0.70 to $0.76 — came in below Wall Street expectations of $0.74.
“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,” finance chief Karen Parkhill said. “We are well practiced at managing through headwinds and remain focused on executing our mitigation plans,” she added.
In a research note, analysts at BofA Securities, including Wamsi Mohan, warned that rising memory chip costs could place downward pressure on HP’s fiscal 2026 outlook as the year progresses.