HP's PC shipments drop overshadows strong revenue growth, shares slide

HP, like peers Dell Technologies, Apple and China's Lenovo Group, is grappling with a global memory chip squeeze, fueled by massive AI data center buildouts that are sucking up capacity.

While PC unit revenue rose 18% in the third quarter, unit shipments dropped 16%, as it focused on selling more expensive, higher-margin products, including AI PCs. Printing revenue fell 2% to $3.9 billion in the three months ended July 31.

Operating margin for the PC segment shrank to 4.6% from the prior quarter's 5.2%, as rising commodity and memory costs outpaced price increases.

HP expects fourth-quarter adjusted earnings per share between 69 cents and 79 cents, above analysts' average estimate of 67 cents, according to data compiled by LSEG. The forecast includes an 8-cent boost from estimated tariff refunds.