After the market closes on Tuesday we’ll get to see earnings out of Hewlett-Packard Co. (NYSE: HPQ). The estimates from First Call are $0.81 EPS on $27.59 billion in revenues. Next quarter estimates are $27.42 billion in revenues. Estimates for fiscal Oct-2008 are $3.80 EPS on $117.79 billion in revenues.
Analysts have an average price target north of $57.00. With Friday being options expiration date, we aren’t using options as a predictor until only the March option comparisons can be made on Tuesday. While this one was enjoying a steady run in 2007, its chart has been hampered lately. While shares bounced off of $41.00 or so in both January and February, H-P shares are trading well under the key moving averages: $46.85 is its 50-day moving average and $47.69 is its 200-day moving average.
As Dell (NASDAQ: DELL) shares have been under pressure and are much farther off of 2007 highs, you can imagine the PC-Giant in Austin will be figuring how to react to this earnings report as well. Dell reports earnings at the end of February.
Hewlett-Packard Co.’s 52-week trading range is $38.15 to $53.48, so its stock is in a bit of a long-term no man’s land as of now. It seems that the easy times of Mark Hurd’s turnaround have been seen. Now we’ll have to see if his cost cuts and margin expansion work well in what feels like a bear market and what is definitely a cooling economy.
Jon C. Ogg
February 16, 2008