Key Points
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HP posted better-than-expected sales and earnings results for fiscal 2026.
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The company also raised its adjusted earnings forecast for the full-year.
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HP expects that higher component costs will eat into its operating margin.
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HP (NYSE: HPQ) stock is moving lower in Thursday’s trading following the release of the company’s latest quarterly results. The company’s share price had fallen 6.2% as of 11 a.m. ET even though the S&P 500 was up 0.6% and the Nasdaq Composite was up 1.2%. The stock had been off as much as 12.4% earlier in the session.
After the market closed yesterday, HP published results for the third quarter of its 2026 fiscal year — which ended July 31. The company posted sales and earnings for the period that came in substantially better than the average analyst targets, but margin concerns are weighing on the tech hardware player’s valuation.
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HP’s fiscal Q3 results actually looked strong
HP recorded non-GAAP (adjusted) earnings per share of $0.83 on sales of $15.68 billion in fiscal Q3. The print actually came in far better than the average Wall Street targets, which had called for adjusted earnings per share of $0.69 on sales of $14.43 billion. Sales were up 12.6% year over year in the period, and adjusted earnings per share were up roughly 10.7%.
What’s next for HP?
Along with the Q3 report, the company also raised its target for full-year adjusted earnings per share to between $3.19 and $3.29 — up from previous guidance for adjusted earnings per share between $2.90 and $3.10. On the other hand, the fiscal Q3 earnings beat and guidance raise were substantially driven by tariff refunds.
While the company raised its full-year earnings forecast, it also cautioned that it expected costs to rise in conjunction with higher component costs and that this would pressure operating margins. The company also said that it expects the addressable market in the consumer PC market to decline substantially in this year’s second half, and investors are focusing on those pressures over the headline fiscal Q3 results and guidance that otherwise look encouraging.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends HP. The Motley Fool has a disclosure policy.
