What to Look For in HP and HPE Earnings After the Close

February 22, 2018 by Chris Lange

HP Inc. (NYSE: HPQ) and Hewlett Packard Enterprise Co. (NYSE: HPE) are both scheduled to release their fiscal first-quarter financial results after the markets close on Thursday. The old Hewlett-Packard split into two companies back in November 2015, but they have more or less shared the same reporting dates.

As for HP, the consensus estimates call for $0.42 in earnings per share (EPS) on $13.49 billion in revenue. The same period of last year EPS of had $0.38 and $12.68 billion in revenue.

Fourth-quarter 2017 shipments of personal computers, including desktops and laptops, fell 2% year over year to an estimated 71.56 million units. HP was the volume and market-share leader with worldwide shipments totaling 16.08 million in the quarter and a share of 22.5%. For the full year, worldwide shipments dipped 2.8% to 262.54 million units.

For all of 2017, HP led in shipments with 55.16 million units, for a market share of 21%, just ahead of Lenovo’s 20.8% share. Dell claimed 15.2% share and Apple garnered a 7.4% share.

A few analysts weighed in on HP ahead of the earnings report:

  • Guggenheim has a Hold rating.
  • Goldman Sachs has a Neutral rating with a $25 price target.
  • Mizuho has a Neutral rating with a $23 price target.
  • Morgan Stanley has an Equal Weight rating and a $25 target.
  • Loop Capital has a Buy rating with a $28 target price.
  • Citigroup has a Buy rating with a $27 price target.
  • Barclays has an Equal Weight rating with a $23 target.

Shares of HP were last seen trading near $21.60, with a consensus analyst price target of $24.53 and a 52-week range of $16.48 to $24.10.

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Thomson Reuters has consensus estimates for Hewlett Packard Enterprise of $0.22 in EPS on revenue of $7.07 billion. In the same period of last year, reported EPS of $0.45 and $11.41 billion in revenue.

With strong top-line revenue growth to end fiscal 2017, and earnings above the previous outlook and the second consecutive quarter of sequential margin improvement, HPE’s most recent quarterly results were a reflection of the progress it has made over the past two years to transform into a focused and innovative organization.

Prior to the release of the report, analysts issued these calls on the stock:

  • Loop Capital has a Buy rating.
  • Goldman Sachs has a Neutral rating and a $16 price target.
  • Deutsche Bank has a Buy rating with a $19 price target.
  • Sanford Bernstein has a Buy rating with an $18 target.

HPE traded near $16.40 on Thursday, in a 52-week range of $12.70 to $17.07 and with a consensus price target of $15.82.

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