HP Falls on Investor Concerns About PC Demand Trends

HP Inc. shares fell after investors looked past a widely expected boost in the company’s profit forecast and worried about future demand for computers and printers.

Profit, excluding items such as restructuring costs, will be 69 cents to 79 cents a share in the period ending in October, HP said Wednesday in a statement. Analysts, on average, estimated 67 cents, according to data compiled by Bloomberg. For the full year, the company said adjusted earnings will be $3.19 to $3.29 a share. Analysts projected $3.05. The results include the impact of tariff refunds.

HP has been managing through an unprecedented jump in memory chip costs that has pushed it to raise prices for many of its PCs and redesign others. Investors had already expected a “better-than-feared July quarter,” and are now concerned about worsening trends in the PC and printer markets, analysts at Morgan Stanley wrote in a note before the results. Shareholders are unlikely to be reassured until the company offers its outlook for next year, said analysts at JPMorgan Chase & Co.

While PC unit revenue increased 18% in the fiscal third quarter, unit shipments dropped 16%.

The shares declined about 10% in extended trading after closing at $30.52 in New York. The stock had jumped 37% this year through the close.

In the fiscal third quarter, total sales rose about 13% to $15.7 billion. PC unit revenue increased to $11.8 billion, fueled by a 22% increase in sales of commercial models. Printer unit revenue dropped 2% to $3.9 billion, in line with estimates.

Profit, excluding some items, was 83 cents in the period ended July 31 and included and 11-cent gain from tariff refunds.