Key Takeaways
- HPQ shares plummeted 9.3% after market close to $27.68, even after surpassing Wall Street’s earnings and revenue projections.
- The company delivered earnings per share of $0.83 compared to analyst expectations of $0.66, while revenue hit $15.7B against forecasts of $14.34B.
- Unit volumes in the personal systems segment declined 16%, while consumer units plunged 19%.
- Ongoing memory chip supply constraints, referred to as “RAMageddon,” continue to pressure PC and laptop demand.
- The company increased its fiscal year EPS forecast to a range of $3.19-$3.29 from the earlier $2.90-$3.10 projection.
Shares of HP Inc (HPQ) tumbled 9.3% during after-hours trading Tuesday, sliding to $27.68, following the technology giant’s release of fiscal third-quarter financial results covering the period through July.
The decline caught some market observers off guard, particularly since HP exceeded expectations on both the top and bottom lines. Earnings per share reached $0.83, topping analyst projections of $0.66 by seventeen cents. Total revenue landed at $15.7 billion, significantly above the $14.34 billion consensus forecast.
Shares had finished the regular trading session at $30.52 prior to the after-market decline.
HP $HPQ Q3’26 EARNINGS HIGHLIGHTS
🔹 Revenue: $15.7B (Est. $14.38B) 🟢; +12.5% YoY
🔹 Adj. EPS: $0.83 (Est. $0.69) 🟢; +11% YoY
🔹 Free Cash Flow: $1.6B (Est. $597M) 🟢Raises FY26 Guide:
🔹 Adj. EPS: $3.19-$3.29 (Est. $3.04) 🟢
🔹 Free Cash Flow: $3.0B-$3.2B (Est. $2.89B) 🟢…— Wall St Engine (@wallstengine) August 26, 2026
The company’s personal systems segment, encompassing primarily laptop products, propelled the revenue outperformance. This division generated $11.8 billion compared to Wall Street’s $10.6 billion estimate.
Printing division revenue totaled $3.9 billion, matching expectations but trailing slightly behind the $4.0 billion recorded during the comparable year-ago period.
Tariff-related refunds also contributed to the earnings upside. HP disclosed that these refunds provided an eleven-cent favorable earnings impact per share. However, the company would have still exceeded projections even excluding this benefit.
Volume Trends Paint Concerning Picture
While revenue figures impressed, unit volume metrics revealed a more troubling narrative. Personal systems unit shipments contracted 16% year-over-year throughout the quarter. Consumer unit volumes experienced an even steeper decline, falling 19%.
This represents a significant acceleration in deterioration compared to the previous quarter, when personal systems units fell just 7% and consumer units dropped 8%.
Printing unit shipments decreased 7%, showing marginal improvement versus the prior quarter’s 8% contraction.
The primary driver behind these challenges is what industry analysts have dubbed “RAMageddon.” Artificial intelligence data centers are absorbing memory chip supply at unprecedented rates, constraining availability for PC manufacturers like HP. Since memory represents a substantial component cost in laptops and desktops, constrained supply has pushed prices higher.
Given that HP’s PC and laptop operations account for approximately 70% of total company revenue, the memory shortage presents a material headwind.
Analyst Community Grows Skeptical
Wall Street sentiment toward HPQ has cooled considerably. Currently, just 2 of the 19 analysts monitored by FactSet maintain Buy ratings on the stock. This compares unfavorably to 7 out of 19 analysts holding Buy recommendations two years earlier.
CFRA analyst Brooks Idlet had expressed concerns prior to the earnings release, stating his firm anticipated “a worsening decline in FY27 as memory costs increase.” He observed that additional PC price increases could render HP’s offerings “harder to justify” for potential customers.
While HP has implemented price hikes to counterbalance elevated memory expenses, and corporate appetite for Windows 11 and AI-enabled systems has offered some support, this favorable dynamic seems to be weakening.
One bright spot: HP elevated its full-year earnings guidance. The company now projects fiscal 2026 EPS between $3.19 and $3.29, up from its previous $2.90 to $3.10 range. Analyst consensus had previously settled at $3.04.
Year-to-date, HPQ has advanced approximately 10%, though shares remain roughly 20% beneath their 2024 high near $38 per share.
Over the past 90 days, HP has received 8 upward EPS revisions and 2 downward revisions, and maintains a “good performance” Financial Health rating according to InvestingPro.
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