HP Inc stated that it anticipated continued instability in the memory chip market that could extend into the following year, and it warned about a decrease in its PC shipments, resulting in a decline of approximately six percent in its stock value during after-hours trading.

The manufacturer of personal electronic devices has announced that it anticipates adjusted earnings for the fiscal year ending on October 31, 2026 to fall towards the lower end of the projected range of $2.90 to $3.20 per share.

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Additionally, the company foresees a double-digit decrease in PC unit shipments, which aligns with current industry patterns.

HP, along with competitors like Dell, is facing escalated expenses due to a scarcity of memory chips that has impacted the technology sector. This shortage is exacerbated by the extensive construction of AI data centers that are consuming capacity.

In response, the company announced measures to address this issue, such as modifying its supply chain and implementing price increases to counteract the effects of the significant tariffs imposed by US President Donald Trump.

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Karen Parkhill, the Chief Financial Officer of HP, stated that despite facing rising memory costs in a fast-paced market, the company is maintaining its annual forecast based on the first quarter performance, albeit expecting the actual outcomes to lean towards the lower end of the projected range.

However, the organization expressed optimism about the increased demand from Europe and Asia due to the continuous Windows 11 upgrade cycle. It also mentioned that the shift towards commercial and consumer premium devices had a positive impact on its average selling prices. In addition, HP noted a notable increase in customer demand in the first quarter, particularly in its consumer business segment, which experienced a growth of 16 percent.

The company's surpassing of analysts' predictions for first-quarter revenue and profit was attributed to its utilization of AI-powered PCs, among other factors. The company reported that artificial intelligence enabled personal computers accounted for over 35 percent of its overall PC shipments in the first quarter, showing an increase from the 30 percent recorded in the preceding quarter.

HP indicated that they were assessing the recent tariff pronouncements made by President Trump, however, they did not foresee any immediate adverse impact on their business. Interim CEO Bruce Broussard mentioned during a conference call with analysts that they will persist in communicating with the administration regarding this issue and others.

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A White House official announced that the US has implemented a temporary 10 percent global import tariff, with plans to potentially raise it to 15 percent.

This development has caused uncertainty regarding the country's tariff policies following a recent Supreme Court ruling. In the initial quarter, the company experienced a 6.9 percent increase in revenue, reaching a total of $14.44 billion, surpassing the projected figure of $13.94 billion as reported by LSEG data.

Additionally, the adjusted earnings per share for the quarter ending on January 31 were 81 cents, surpassing expectations of 76 cents.

The personal systems unit experienced a notable 11 percent increase in revenue to reach $10.25 billion in the quarter. Conversely, revenue in the printing segment, encompassing office-oriented printers and service offerings, saw a decline of two percent to $4.19 billion.

The company predicted that its second-quarter adjusted earnings per share would fall within the range of 70 cents to 76 cents, as opposed to the previously projected 74 cents.