By Connor Hart

HP is getting ready to raise prices on certain products and accelerating efforts to move more of its production out of China as the technology company grapples with tariff pressure.

The plans come as the computer and printer maker lowered its outlook for the year, citing higher-than-expected tariff costs and moderating demand for hardware in the recent quarter.

"Tariff charges were bigger and impacted more countries than we were expecting," Chief Executive Enrique Lores said Wednesday.

As a result, the company has increased its production in countries such as Vietnam, Thailand, India, Mexico and the U.S. It expects nearly all of its North American products to be built outside of China by the end of June, Lores said. HP will also roll out "targeted pricing actions," while simultaneously increasing its focus on cost control.

Lores expects these combined actions to offset all tariff costs by its fiscal fourth quarter, ending in October. HP's cost-cutting plan--which was first announced in November 2022 and will see the company eliminate up to 9,000 jobs--is slightly ahead of schedule and will likely result in higher savings than initially forecast, he added.

Meanwhile, the personal computing market continues to grow, albeit at a slower pace than before. Commercial customers will be the key driver of growth for the remainder of the year, boosted by the continued adoption of artificial intelligence, Lores said.

He noted that HP is on track to meet its goal to have AI PCs account for more than 25% of total shipments by the fourth quarter.

For its fiscal 2025, HP now expects adjusted per-share earnings of $3 to $3.30, down from a prior view of $3.45 to $3.75. This outlook includes a charge of 68 cents a share, which the company said is primarily tied to restructuring and other charges.

For the current quarter, the company forecast adjusted per-share earnings of 68 cents to 80 cents, including an 11 cent charge tied to restructuring.

Analysts polled by FactSet were looking for adjusted earnings of 90 cents a share in the current quarter, and $3.56 a share for the year.

The outlooks came as HP logged lower-than-expected sales and profit for its second quarter.

The company posted a profit of $406 million, or 42 cents a share, for the three months ended April 30, down from $607 million, or 61 cents a share, a year earlier.

Adjusted per-share earnings came in at 71 cents, missing the 80 cents that analysts expected.

Revenue rose 3.3% to $13.22 billion. Analysts expected sales of $13.13 billion. Personal systems revenue increased 7%, offsetting a 4% drop in net printing sales.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

May 28, 2025 16:15 ET (20:15 GMT)

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