🖨️ HP under pressure of tariffs: Profit below estimates, outlook weak and shares plummet!
HP Inc $HPQ is facing a challenging period, with second-quarter sales beating expectations but earnings falling short and the outlook disappointing the market. As a result, the stock plummeted by more than 15 %which the stock has erased to its current - 8 %. The main reason for this is the additional costs due to the US tariffs that hit the company across the board.

📊 Q2 FY25 financial results:
Earnings per share (non-GAAP): $0.71 ($0.80 expected)

Revenue: USD 13.22 billion (USD 13.14 billion expected)

Net Income (GAAP): $406 million. USD 406 million (USD 607 million last year)

YoY revenue growth: +3.3%

HP Although it surprised with a slight increase in revenue, operating costs rose significantly due to tariffs imposed on goods manufactured in China. The company is responding by shifting production to Vietnam, Thailand, India, Mexico a USAwith the goal of having the majority of products sold in North America are manufactured outside of China by the end of June.

🧾 Q3 Outlook:
Earnings per share (Q3 non-GAAP): $0.68-0.80 (consensus: $0.90)

Earnings per share (FY25 non-GAAP): $3.00-3.30 (consensus $3.06-3.36)

FY25 free cash flow (estimate): USD 2.6-3.0 billion

Although HP is actively investing in supply chain diversification, the transition is costly and not yet delivering immediate results. Free cash flow for the second quarter was even negative (-USD 95 million)although it remains positive for the first half of the year.

💵 Returning value to shareholders:
Dividends (H1 FY25): 546 million. USD

Share buybacks (H1 FY25): 200 million. USD 200 MILLION

Macroeconomic and commercial barriers weigh on operating margins and reduce the predictability of results.

The stock has reacted sharply but the company's fundamentals have not changed.

🧭 HP is in a period of transition. But the return of margins and supply chain stabilization is important.

How do you see it? What is your view of HP?