HP Inc. shares dropped sharply on Monday after the company announced it would not provide fiscal-year guidance yet. HP pointed to a slump in PC sales across the industry, which it expects to last through 2027.
In a securities filing, the company said it is still in its planning period and will wait before giving full-year guidance. This matches what the chief financial officer said last month, when she explained it was too soon to give a formal outlook.
The main problem is falling PC unit sales. HP said it is still too early to share its full outlook for the next fiscal year, but it expects industry-wide PC sales to drop by a mid-single-digit percentage in 2027 compared to 2026.
HP shares dropped nearly 4% on Monday, making the company one of the weaker performers in a market that otherwise saw solid gains. Shares of Lenovo Group, another PC maker, also fell.
Memory chip shortages and higher costs have led HP and other companies to sell fewer devices at higher prices. This has hurt sales of personal computers and laptops, which make up about 70% of HP’s total revenue.
During its latest earnings call, HP management said that higher input costs are hurting short-term operating margins, especially in the Personal Systems division. Although overall revenue increased, unit sales in Personal Systems dropped 16%, mainly because consumer units fell by 19%. This was a bigger drop than in the previous quarter. Interim CEO Bruce Dale Broussard told analysts that HP is carrying out its cost-saving plan well. He said he is confident about HP’s memory and storage supply for this year and stressed the need to keep focusing on future needs.
HP is expected to share more updates on its cost-saving efforts when it reports its fiscal fourth-quarter results.
