HP Inc. hastens China exit as tariffs kick a hole in its profits
(2025/05/29)
- Reference: 1748500512
- News link: https://www.theregister.co.uk/2025/05/29/hp_inc_q2_2025/
- Source link:
HP Inc. is close to ending production of North-America-bound products in China, after US tariffs kicked a hole in its quarterly profits.
“A quarter ago, we shared that our goal was to have less than ten percent of the products in North America being shipped from China by September,” HP president and CEO Enrique Lores told investors on the company’s Q2 2025 earnings call. “We have accelerated that and we share that now almost no products will be coming from China sold in the US by June. It’s a very significant acceleration of the plan that we have.
“We accelerated the shift of factories out from China into Southeast Asia, into Mexico to a certain extent in the US to mitigate the impact of the change,” he added.
[1]
Lores also revealed that HP has removed the US as a distribution hub for products sold in Canada or to Latin America. Doing so means HP doesn’t have to pay tariffs.
[2]
[3]
HP president and CEO Enrique Lores on Wednesday blamed lower than expected profits on “additional tariff costs that could not be fully mitigated in the quarter”.
The PCs-and-printers outfit posted $13.2 billion revenue for Q2 2025, up 3.3 percent year over year. Earnings per share, however, came in at $0.71 – rather below the expected $0.79.
[4]
CFO Karen Parkhill said HP “worked aggressively to respond to changes in the regulatory trade environment” however “tariff increases announced in April were higher than expected.
“The full benefit of these mitigating actions can take a few months lead time depending on the scope,” she added, before pledging that HP will “fully mitigate” the impact of tariffs by Q4 – which runs from August to October.
For now, HP has taken what Lores called “price actions” – aka price increases – for personal systems and printing hardware. The CEO said HP’s competitors have done likewise in both fields.
[5]HP Inc settles printer toner lockout lawsuit with a promise to make firmware updates optional
[6]HP CEO pay for 2024 = 261,658 toner cartridges
[7]HP secures $50M CHIPS Act boost to adapt inkjet tech for life sciences
[8]HP CEO: Printed pages are down 20% since pandemic
Lores warned that HP thinks the company might not fare well in the second half of its financial year.
“We are today in a very different economic situation from where we were a few months ago in terms of both consumer and business confidence,” he said. Combined with increased prices, he predicted potential “impact in the demand that we see” for both commercial and business products.
[9]
Parkhill said businesses buying new PCs due to Microsoft ending support for Windows 10 should help sales. Lores said some of those buyers will pick AI PCs because they want to take advantage of AI-enabled software – once it arrives.
“We are very pleased with the progress that we see in AI PCs,” he said. “Our goal is that there will be more than 25 percent of the mix of PCs by the end of the year.” ®
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[6] https://www.theregister.com/2025/02/26/hp_ceo_pay_for_2024/
[7] https://www.theregister.com/2024/08/28/hp_chips_act_cash/
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[10] https://whitepapers.theregister.com/
“A quarter ago, we shared that our goal was to have less than ten percent of the products in North America being shipped from China by September,” HP president and CEO Enrique Lores told investors on the company’s Q2 2025 earnings call. “We have accelerated that and we share that now almost no products will be coming from China sold in the US by June. It’s a very significant acceleration of the plan that we have.
“We accelerated the shift of factories out from China into Southeast Asia, into Mexico to a certain extent in the US to mitigate the impact of the change,” he added.
[1]
Lores also revealed that HP has removed the US as a distribution hub for products sold in Canada or to Latin America. Doing so means HP doesn’t have to pay tariffs.
[2]
[3]
HP president and CEO Enrique Lores on Wednesday blamed lower than expected profits on “additional tariff costs that could not be fully mitigated in the quarter”.
The PCs-and-printers outfit posted $13.2 billion revenue for Q2 2025, up 3.3 percent year over year. Earnings per share, however, came in at $0.71 – rather below the expected $0.79.
[4]
CFO Karen Parkhill said HP “worked aggressively to respond to changes in the regulatory trade environment” however “tariff increases announced in April were higher than expected.
“The full benefit of these mitigating actions can take a few months lead time depending on the scope,” she added, before pledging that HP will “fully mitigate” the impact of tariffs by Q4 – which runs from August to October.
For now, HP has taken what Lores called “price actions” – aka price increases – for personal systems and printing hardware. The CEO said HP’s competitors have done likewise in both fields.
[5]HP Inc settles printer toner lockout lawsuit with a promise to make firmware updates optional
[6]HP CEO pay for 2024 = 261,658 toner cartridges
[7]HP secures $50M CHIPS Act boost to adapt inkjet tech for life sciences
[8]HP CEO: Printed pages are down 20% since pandemic
Lores warned that HP thinks the company might not fare well in the second half of its financial year.
“We are today in a very different economic situation from where we were a few months ago in terms of both consumer and business confidence,” he said. Combined with increased prices, he predicted potential “impact in the demand that we see” for both commercial and business products.
[9]
Parkhill said businesses buying new PCs due to Microsoft ending support for Windows 10 should help sales. Lores said some of those buyers will pick AI PCs because they want to take advantage of AI-enabled software – once it arrives.
“We are very pleased with the progress that we see in AI PCs,” he said. “Our goal is that there will be more than 25 percent of the mix of PCs by the end of the year.” ®
Get our [10]Tech Resources
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[5] https://www.theregister.com/2025/03/19/hp_printer_lawsuit_settled/
[6] https://www.theregister.com/2025/02/26/hp_ceo_pay_for_2024/
[7] https://www.theregister.com/2024/08/28/hp_chips_act_cash/
[8] https://www.theregister.com/2024/06/07/hp_ceo_printed_pages/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aDgwOkfyKu-dPv7f3h7iWQAAAlA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://whitepapers.theregister.com/
Re: Keep pandering, but...
Sandtitz
HP isn't pandering, the move seem to be based on economic reasons.
HP is moving production from China to SE Asia and Mexico and "to a certain extent in the US", which is corporate speak of next to nothing. The US is probably HP's main market and those Trump tariffs on their products would be untenable.
They have also "removed the US as a distribution hub for products sold in Canada or to Latin America" to avoid any further tariffs imposed by them. That is the opposite of pandering to Trump.
Are you angry that HP is moving production out of China? How fat is Xi Jinping?
pardon me?
rskurat
what, pray tell, is an "AI PC"?
Re: pardon me?
blu3b3rry
A marketing term aimed squarely at those with more money than sense.
Re: pardon me?
Anonymous Coward
' what, pray tell, is an "AI PC"? '
Based on my experience of the low end PITA HP products an AI PC would likely be an anally inserted PC † .
† there is a surprisingly wide choice of what PC might mean in this context; Pulsating cylinder one of the least gross.
Re: pardon me?
Ken Shabby
Just wait until they bring out the “AI” printer, the ink will be more expensive than Unicorn semen.
Re: pardon me?
that one in the corner
Dunno, but I can you an "Eh? Aye!" PC or an "Ey Oop"* PC from one of our regional suppliers.
* Good for Smalltalk
Keep pandering, but...
Trump will screw you over at some point regardless of what country you move your production to.
He'll find a way to screw you over even if you do what we "wants" and are stupid enough to move your production to the US. He'll change whatever economic policies you built that massive investment on overnight.