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Soaring memory costs weigh on earnings; HP's full-year profits may hit the lower end of estimates
HP (HPQ.N) said its full-year earnings are likely to come in at the lower end of its previous forecast range due to tariffs and rising memory chip prices. The stock fell about 7% in after-hours trading following a close of $18.20 in New York. Over the past 12 months, the stock has fallen 48%. Today, as consumers purchase new computers to replace outdated devices and gain access to new AI features, HP and other device manufacturers are facing the dual challenges of rising memory chip prices and supply shortages. The company said memory issues will persist throughout the fiscal year and may extend into the next fiscal year. HP said it is raising product prices, working to bring in more suppliers, and modifying some products to reduce memory requirements. The company said today that it has made progress in these areas, including completing the certification of new suppliers. HP announced the launch of a multi-year cost-cutting plan aimed at saving the company $1 billion annually by 2028.
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