HP reports Q1 revenue of $14.44B, up 6.9% YoY but below estimates, while forecasting FY 2026 results at the low end of projections, triggering a sharp after-hours selloff.
HP Inc. (HPQ) saw its stock price plummet more than 6% in after-hours trading on Monday following the release of its first-quarter fiscal 2026 earnings report. The personal computer and printer manufacturer reported revenue of $14.44 billion, representing a 6.9% year-over-year increase, but falling short of analysts' expectations of $13.94 billion.
While the revenue growth demonstrates continued demand for HP's products, investors reacted negatively to the company's forward guidance. HP stated it expects fiscal year 2026 results to come in at the "low end of its forecasts," raising concerns about potential headwinds in the PC and printing markets.
The earnings miss and cautious outlook come amid a challenging environment for technology hardware companies. The PC market has shown signs of stabilization after several years of decline following the pandemic-driven surge in demand, but growth remains modest. HP faces intense competition from rivals like Dell, Lenovo, and Apple in the PC segment, while the printing business continues to face long-term secular decline as more documents move to digital formats.
HP's Q1 performance showed some positive indicators despite the market reaction. The company's revenue growth of 6.9% marks a significant improvement over recent quarters, suggesting that inventory corrections and supply chain issues that plagued the industry in recent years may be easing. The printing segment, while still declining, showed better-than-expected performance, while the PC business benefited from commercial refresh cycles and continued remote work trends.
The after-hours selloff reflects investor sensitivity to any signs of weakness in the tech hardware sector, particularly given concerns about potential tariffs, supply chain disruptions, and macroeconomic uncertainty. HP's stock had already been under pressure in recent months as investors rotated out of hardware stocks in favor of AI and software companies.
HP management will likely face questions during the earnings call about the factors driving the conservative guidance, including potential impacts from trade policy, component costs, and competitive dynamics in both the PC and printing markets. The company's ability to execute on its turnaround strategy and maintain profitability in a challenging environment will be closely watched by investors.
This earnings report highlights the ongoing challenges facing traditional hardware manufacturers as they navigate a rapidly evolving technology landscape where software, services, and AI capabilities increasingly drive value creation. HP's performance will be compared against other PC makers' results in the coming weeks to gauge broader industry trends.
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