HP Inc (NYSE: HPQ) released mixed Q2 financial results, exceeding revenue expectations but falling short on earnings. The outlook for the full year also took a cautious turn.

Q2 Financial Performance

• EPS: Reported at $0.71 versus an estimate of $0.79, a miss of $0.08.

• Revenue: Came in at $13.20 billion, outperforming the consensus estimate of $13.07 billion with a 1 percent YoY increase.

The earnings miss is attributed to ongoing margin pressures in HP’s printing segment alongside rising supply chain costs, despite solid performance in combined PC and printing sales.

Guidance and Market Expectations

• FY25 EPS Guidance: Projected at $3.00 to $3.30, below the consensus of $3.50.

• Market Implication: The revised guidance underscores the persistent cost pressures and weak pricing power in the printer supplies segment.

Profitability and Competitive Position

As EPS revisions shift negative (with 1 positive and 10 negative in the last 90 days), investors will focus on profitability metrics:

• Operating Margin: Investors must identify segments where HP can regain pricing power.

• Balance Sheet Resilience: Having zero net debt in Q2 equips HP with a buffer for future investments.

Stock Performance Review

• Closing Price: $27.20

• 3-Month Return: Down by -11.9%

• 12-Month Return: Down by -17.1%

The revenue beat may be overshadowed by the EPS miss and lowered guidance, leading to continued pressure on HP shares until meaningful margin improvements are seen.