Shares in HP Inc. fell more than 12% in late trading today after the information technology company missed on earnings in its fiscal 2025 second quarter and warned of increasing costs from U.S. tariffs and macroeconomic uncertainties.

For the quarter ended April 30, HP reported adjusted earnings per share of 71 cents, down from 82 cents in the same quarter of the previous year, on revenue of $13.2 billion, up 3.3% year-over-year. Adjusted earnings fell short of the 71 cents per share expected by analysts, while revenue came in ahead of an expected $13.06 billion.

Update: Shares were down a little less Thursday, falling 7%.

By segment, Printing revenue fell 4.3% from a year ago, to $4.181 billion, Personal Systems revenue rose 7.1%, to $9.024 billion, and “corporate investments and other” were steady at $15 million. Though Personal Systems led the verticals, it only accounted for 4.5% or $409 million of operating profit in the quarter, while HP made $814 million, or 19.5% of revenue, from its printer business.

Business highlights in the quarter included the Feb. 19 announcement that HP planned to acquire assets from Humane Inc., the maker of an artificial intelligence-powered smart pin, for $116 million. The deal included HP acquiring key artificial intelligence capabilities from Humane, including its AI-powered platform, Cosmos, technical talent and intellectual property, including more than 300 patents and patent applications.

The acquisition was pitched as helping advance HP’s transformation into a more experience-led company.

AI was quite the theme through the quarter, with HP introducing new EliteBook Ultra and OmniBook X Series laptops powered by Intel Core Ultra processors and advanced AI features to enhance productivity and workflow efficiency. The company also launched the LaserJet Enterprise 8000 Series printers, notable for their quantum-resilient security capabilities and AI integration.

In gaming and peripherals, HP expanded its AI-driven product lineup with the OMEN 32x Smart Gaming Monitor and HyperX Pulsefire Saga Pro mice, designed for high-performance gaming experiences.

“In Q2, we delivered solid revenue growth, led by strong commercial performance in Personal Systems and continued momentum behind our future of work strategy,” Chief Executive Enrique Lores said in the company’s earnings release. “While results in the quarter were impacted by a dynamic regulatory environment, we responded quickly to accelerate the expansion of our manufacturing footprint and further reduce our cost structure.”

Though not the best quarterly results, what concerned investors is what comes next. “In light of the increased macroeconomic uncertainty, we have adjusted our outlook to reflect moderated demand and the net impact of trade-related costs,” said Chief Financial Officer Karen Parkhill. “We are executing targeted mitigation strategies and assuming current conditions remain, we expect to fully offset these costs by Q4.”

For its fiscal third quarter, HP expects adjusted earnings per share of 68 to 80 cents and for the full year, $3 to $3.30. Analysts were expecting 90 cents per share in the third quarter and $3.49 for the full fiscal year.

The outlook was accompanied by a note that added “HP’s outlook reflects the added cost driven by the current U.S. tariffs in place and associated mitigations.”

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