HP reported fiscal Q3 revenue of US$13.9 billion, up 3.1% year-on-year, with adjusted earnings per share at 75 cents, narrowly beating analyst estimates.

The PC and printer maker projected Q4 profit of 87 to 97 cents per share, aligning with Wall Street expectations.

Personal systems unit revenue rose 6% to US$9.9 billion, driven by a 5% rise in commercial PC sales and an 8% rise in consumer PC revenue.

HP said AI PCs now make up over 25% of its product mix, reaching this milestone ahead of internal targets.

Printer unit sales fell 4% to US$4.0 billion, missing estimates and weighing on profit margins.

The company has shifted manufacturing outside China for most North America-bound goods to manage tariffs, and raised some prices.

Shares fell about 2% in extended trading and are down 17% this year.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ HP’s early supply chain diversification pays off amid escalating tariffs

HP’s proactive approach to tariff mitigation demonstrates the value of early supply chain preparation in an uncertain trade environment.

The company moved manufacturing out of China for “almost all of its products sold in North America” before the current tariff escalation, allowing them to mitigate the majority of tariff costs in Q3 1.

This strategic positioning becomes more valuable as US tariffs have jumped from 2.3% at the end of 2024 to 15.8% currently, with expectations of reaching 18-20% 2.

HP’s CFO explicitly stated they were able to “mitigate the majority of the tariff costs in Q3, while still delivering EPS slightly above the midpoint of our guide” 1.

The company’s ability to maintain earnings guidance of 87-97 cents per share for Q4, in line with analyst expectations of 91 cents, suggests their diversification strategy is providing meaningful protection against trade disruptions 1.

2️⃣ PC market inventory dynamics reveal split between industry trends and individual company experience