HP beats Q2 estimates but trims full-year outlook on memory cost pressure

The institution posted non-GAAP net per stock of $0.86 for the 2nd quarter, good supra its anterior guidance scope of $0.70 to $0.76. Total gross roseate 9% year-over-year to astir $14.4 billion, marking the eighth consecutive 4th of top-line growth.

Personal Systems gross surged 13% year-over-year, though portion shipments declined 7% implicit the aforesaid period. The gross summation was driven mostly by pricing, request pull-ins, and a favorable merchandise premix arsenic AI PCs accounted for 44% of shipments successful the quarter, up from 35% successful the anterior quarter.

Management said it expects AI PCs to correspond up to 50% of shipments successful fiscal 2026, a displacement it anticipates volition enactment higher mean selling prices and improved margins implicit time.

Despite the net beat, HP narrowed its full-year non-GAAP EPS guidance to a scope of $2.90 to $3.10, pulling backmost from a anterior precocious extremity of $3.20. Free currency travel guidance of $2.8 cardinal to $3 cardinal was near unchanged, with some EPS and escaped currency travel present expected to travel successful solidly wrong their respective ranges.

Management besides revised its second-half gross outlook, present projecting the play to travel successful astir adjacent to the archetypal half, compared to earlier expectations of a sequential moderation.

Bank of America analysts, who reiterate an Underperform standing connected the stock, attributed the quarter's spot successful portion to request pull-ins. The analysts flagged slower PC portion growth, representation outgo pressure, and uncertainty astir a enactment modulation arsenic ongoing concerns. The institution is successful the process of uncovering its caller CEO.

Increasing costs for representation and retention chips are expected to measurement connected margins done the remainder of fiscal 2026. Analysts estimation these input outgo headwinds could trim non-GAAP net by astir $0.30 per stock arsenic lower-cost strategical inventory is drawn down.

In the Print segment, gross was level year-over-year with hardware units down 7%. Operating margins came successful astatine 18.3% successful the quarter, though the institution guided full-year Print margins to travel successful solidly wrong the semipermanent range, stepping backmost from anterior guidance that pointed to show adjacent the apical of that range.