Latest news with #tariffs
Reuters
an hour ago
- Business
- Reuters
HP cuts annual profit forecast as tariffs weigh on demand, shares fall
May 28 (Reuters) - HP Inc (HPQ.N), opens new tab cut its annual profit forecast on Wednesday as it expects a moderation in PC market growth at a time when the global economic environment remains volatile, sending its shares down 14% in extended trading. The uncertainty surrounding U.S. tariffs and associated inflationary pressures will negatively impact demand for personal computers in the following quarters in 2025, research firm IDC said last month. HP is seeing the biggest cost impact in its Personal Systems segment, CFO Karen Parkhill said. "The tariff-related costs are due to both the actual cost of the tariffs, as well as the increased investment that we are making to work to offset them." The company expects to offset the costs by the fourth quarter. HP now expects fiscal 2025 adjusted profit between $3.00 and $3.30 per share, down from its prior forecast of $3.45 to $3.75 per share. Analysts had expected a full-year profit of $3.49 per share, according to data compiled by LSEG. The company's second quarter was "impacted by higher-than-expected tariffs that we were not able to fully mitigate," HP CEO Enrique Lores said. "We have recently increased production in Vietnam, Thailand, India, Mexico and the U.S., and by the end of June, we expect nearly all our products sold in North America will be built outside of China," Lores added. For the second quarter ended April 30, HP reported revenue of $13.22 billion, compared with analysts' average estimate of $13.14 billion. On an adjusted basis, the company earned 71 cents per share, missing estimates of 80 cents. Sales at HP's Personal Systems segment — home to its desktop and notebook PCs — rose 7% from a year earlier, while sales at its Printing unit fell 4% in the quarter. The PC maker forecast third-quarter adjusted profit per share between 68 cents and 80 cents, compared with estimates of 90 cents.
Bloomberg
an hour ago
- Business
- Bloomberg
HP Profit Outlook Falls Short on Tariffs Costs, Economy
HP Inc. gave a profit outlook for the current quarter that fell short of expectations, and cut its annual earnings forecast, pointing toward a weaker economy and continuing costs from US tariffs on goods from China. The shares fell about 15% in extended trading. Earnings, excluding some items, will be 68 cents to 80 cents a share in the period ending in July, the maker of computers and printers said Wednesday in a statement. Analysts, on average, estimated 91 cents. Fiscal second-quarter profit was 71 cents a share, compared with the average estimate of 81 cents. Profit was dented by 12 cents from the impact related to tariffs and HP's spending to move manufacturing out of China, said Chief Financial Officer Karen Parkhill.
Associated Press
an hour ago
- Business
- Associated Press
Trump rejects claim he's 'chickening out' on tariffs just because he keeps changing rates
WASHINGTON (AP) — President Donald Trump wants the world to know he's no 'chicken' just because he's repeatedly backed off high tariff threats. The U.S. Republican president's tendency to levy extremely high import taxes and then retreat has created what's known as the 'TACO' trade, an acronym coined by The Financial Times' Robert Armstrong that stands for 'Trump Always Chickens Out.' Markets generally sell off when Trump makes his tariff threats and then recover after he backs down. Trump was visibly offended when asked about the phrase Wednesday and rejected the idea that he's 'chickening out,' saying that the reporter's inquiry was 'nasty.' 'You call that chickening out?' Trump said. 'It's called negotiation,' adding that he sets a 'ridiculous high number and I go down a little bit, you know, a little bit' until the figure is more reasonable. Trump defended his approach of jacking up tariff rates to 145% on Chinese goods, only to pull back to 30% for 90 days of negotiations. He similarly last week threatened to impose a 50% tax on goods from the European Union starting in June, only to delay the tariff hike until July 9 so that negotiations can occur while the baseline 10% tariff continues to be charged. Similar dramas have played out over autos, electronics and the universal tariffs that Trump announced on April 2 that were based in part on individual trade deficits with other countries. In each case, Trump generally took the stock market on a roller coaster. Investors sold-off when the tariff threats were announced as they implied slower economic growth and higher prices, which would hurt companies' profits. Stocks then rebounded after Trump stepped back. As of Wednesday afternoon, the S&P 500 stock index was up slightly so far this year. But the index was down as much as 15% on the year on April 8, a reflection of the volatility that Trump's changing policies have created. He said that approach has led to $14 trillion in new investment in the U.S., a figure that appears to be artificially high and has not been fully verified by economic data. 'Don't ever say what you said,' Trump said with regard to the notion of him chickening out. 'To me, that's the nastiest question.' Trump said that EU officials would not be negotiating if not for his 50% tariff, saying he usually has the opposite problem of being 'too tough.'
Bloomberg
2 hours ago
- Business
- Bloomberg
Trump Bristles at ‘TACO Trade' That Bets on Him Backing Down
By Updated on Save President Donald Trump bristled at suggestions that Wall Street believes he's ultimately unwilling to follow through on extreme tariff threats, saying his repeated retreats are instead part of a strategy to exert trade concessions. 'It's called negotiation,' Trump said on Wednesday, adding that he intentionally would 'set a number at a ridiculous high number' and then 'go down a little bit' as part of talks.
The National
2 hours ago
- Business
- The National
Fed expects difficult trade-offs if Trump tariffs reignite inflation, meeting minutes show
Federal Reserve officials expressed concern that they could face a challenging decision if President Donald Trump's tariffs bring a surge in inflation, according to minutes from the US central bank's May meeting, released on Wednesday. The May 6-7 meeting minutes showed central bankers felt a heightened degree of uncertainty for the economic outlook largely because of tariffs. As a result, Fed officials decided to leave rates unchanged at about 4.3 per cent. The Central Bank of the UAE announced it had also left its rate unchanged following the US central bank's decision. Fed officials also saw rising risks to both sides of their dual mandate: price stability and maximum employment. "The committee might face difficult trade-offs if inflation proves to be more persistent while the outlooks for growth and employment weaken,' minutes from the meeting read. And "almost all' officials said inflation could be more persistent than expected, while also highlighting the importance of keeping longer-run inflations in check. "Participants judged that downside risks to employment and economic activity and upside risks to inflation had risen, primarily reflecting the potential effects of tariff increases,' the minutes read. Mr Trump's tariff agenda has created a dilemma for the Fed. Economists argue tariffs could lead to higher inflation – which the Fed would counter with higher interest rates – and a weakening employment situation – which the central bank would counter with lower interest rates. Minutes from the May meeting underscore the cautious approach Fed officials are taking in response to Mr Trump's changing tariff decisions. Trade tension between the US and China abated a few days after the Fed meeting, with Washington and Beijing agreeing to a 90-day pause on most tariffs. The US and UK also agreed to a trade deal this month. On Sunday, Mr Trump said he would delay a 50 per cent tariff on the EU until July 9, just 48 hours after pledging to impose the new charges on the 27-member bloc. Since their most recent meeting, officials have largely echoed Fed Chairman Jerome Powell's assertions that they need more clarity before deciding when to lower rates again. And inflation is still running above the Fed's 2 per cent target. "These arguments support a stance of maintaining the policy rate … until there is more clarity on the path for tariffs and their impact on prices and economic activity,' Minneapolis Fed president Neel Kashkari said in Tokyo on Tuesday. The Fed will hold its next two-day meeting from June 17-18, when the central bank will release updated projections on officials' outlook for inflation, employment and economic growth. Officials will also update their projected interest rate target range. Projections released in March showed a median forecast of two rate cuts for 2025.
