Shares of HP Inc. fell Thursday following the personal computer and printing company's earnings report for the three months ending in July.

Share were down 5.6% at $28.79 after sinking more than twice that much in after-hours trading Wednesday.

The drop came despite a solid earnings beat. HP reported earnings of 83 cents a share on revenue of $15.7 billion. Analysts were expecting earnings of 66 cents a share on revenue of $14.4 billion.

The revenue beat was driven mostly by its personal systems division, which is mostly laptop sales. That brought in $11.8 billion versus the $10.6 billion analysts polled by FactSet had forecast. Sales of its printers came in relatively soft at $3.9 billion, which was in line with expectations, but below the $4.0 billion for the same period last year.

Tariff refunds are part of the reason for the quarterly beat. The company said they accounted for an 11 cent favorable impact on per-share earnings. But even without the refund bump, HP's earnings still exceeded estimates.

Investors were likely disappointed with unit sales. While overall revenue rose, unit sales of personal systems fell 16%, with consumer unit sales falling even further by 19%. That's a steep drop from the second quarter, when unit sales fell 7% overall, with consumer unit sales down 8%. Meanwhile, unit sales in the print division were down 7%, versus last quarter's 8% decline.

While its earnings "look decent on the surface," Baptista Research founder Ishan Majumdar told Barron's Thursday, "the weakened PC shipments and rising memory costs pressuring margins did dampen the mood."

The PC maker has been hit hard by the so-called RAMageddon, a term for the supply shock for memory chips caused by increased demand from artificial-intelligence data centers. While HP's shares are up 30% this year, they're still down about 20% from their 2024 highs around $38 a share.

The memory chip shortage has dampened sales of HP's personal computers and laptops, which account for about 70% of overall sales. The rest comes from its printer division.

Looking ahead, the company raised its earnings outlook for the full fiscal year ending to $3.19 to $3.29 a share. Last quarter it pegged that figure at $2.90 to $3.10.

Analysts have been pretty glum about HP stock lately, with just two of the 19 polled by FactSet rating it a Buy. That's down from seven out of 19 two years ago. As CFRA's Brooks Idlet wrote ahead of earnings, "We expect a worsening decline in FY 27 as memory costs increase," in terms of the firm's earnings per share outlook.

While HP has raised prices to cover its higher memory costs and companies are still upgrading employees to Windows 11-compatible and AI-capable machines, Brooks sees smaller growth ahead in HP's personal systems division. "Further memory increases make for prices that are harder to justify," he wrote.