HP blames memory-price surge as it forecasts earnings at low end of previous guidance

By Steve Goldstein

HP shares were under pressure on Wednesday.

Computer maker HP blamed a surge in memory-chip prices as it forecast earnings for the year to come in at the low end of previously issued guidance.

HP late Tuesday said it expects its adjusted earnings to be at the lower end of the $2.90-to-$3.20 range with free cash flow also at the lower end of a $2.8 billion-to-$3 billion range. Analysts had projected per-share earnings of $2.95 on free cash flow of $2.9 billion, according to FactSet.

HP shares (HPQ) fell 5% in premarket trade.

"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. We are well practiced at managing through headwinds and remain focused on executing our mitigation plans," said CFO Karen Parkhill in a statement.

In the first quarter of its fiscal year, adjusted earnings were 81 cents a share on revenue of $14.4 billion. That was stronger than the 77-cents-a-share of earnings on $13.9 billion in sales that had been forecast by analysts.

HP earns more money from printers, where it has an 18% margin, despite more sales from computers, where its profit margin is 5%.

Personal-system unit sales rose 12%, while sales of printer units fell 6%.

-Steve Goldstein

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02-25-26 0654ET