Hewlett-Packard Co. (
) shares are trading lower ahead of its first-quarter 2012 report,
expected out after the market closes Wednesday.
The Street sees Hewlett-Packard reporting a 36 percent drop in
earnings to 87 cents per share on revenue of $30.7 billion. Over
the last five quarters, Hewlett-Packard has beat Street views by an
average of 3.1 percent.
Shares gained 5.6 percent to $27.98 over the quarter and are about
$1 higher since.
Investors might take a look at what Dell did in the quarter since
it's direct competition to Hewlett-Packard. Revs were strong for
Dell, but margins have been compressed amid HDD supply issues which
reduced supplies and drove up prices. That said, Dell also had
older inventory which helped it to mitigate some of the changes,
but not enough to help Dell beat on the bottom line.
Data from Bloomberg shows 11 analyst firms rate H-P shares a Buy,
17 with a Hold, and five at Sell. The Street's price target average
is $31, with a low of $20 and high of $39.
- Goldman sees revs of $30.394 billion and EPS of 86 cents for
the quarter. Goldman sees the numbers as a non-event with
investors expected to focus more on guidance. This should be a
transitionary quarter for PCs. Goldman said, "We expect the
Personal Systems Group (PSG) to post significant weakness in what
was likely another transition quarter as Hewlett-Packard worked
with customers to reaffirm its commitment to the space following
its strategic review of the division last year."
Goldman believes a strong end to 2011 will bolster
Hewlett-Packard's Enterprise Servers, Storage and Networking
(ESSN) division. Results and commentary from both IBM (
) and EMC (
) point to the same.
Finally, the firm said Printing will be key for HP: "We continue
to believe that the Imaging and Printing Group (
) remains key to the recovery story at Hewlett-Packard in 2012,
though results likely remained under pressure in the January
quarter. Our forecast calls for revenues of $6.08 billion and an
operating margin of 12.4%. With the company facing challenges
across most of its businesses this quarter, continued cyclical
pressures and inventory issues IPG are likely to keep a lid on
results but are also likely to be the source of any upside to the
company's guidance for the year."
- Wells Fargo sees revs of $30 billion and EPS of 84 cents. The
firm is bullish on Meg Whitman and believes Hewlett-Packard could
at least achieve its views. Into the numbers, Wells Fargo said,
"While we expect PC units for the quarter are on track with our
estimate of 93MM (3.6% q/q growth) we are now forecasting
Hewlett-Packard's units will come in a little bit lower than
expected. Server revenues are likely to come essentially where we
expected, and we believe that the lower than expected PC variance
will be offset by the other enterprise businesses."
- Deutsche Bank sees EPS of 86 cents and revs of $31.33
billion. The firm sees a beat on lowered expectations,
conservative guidance, and benign pricing. "We believe
Hewlett-Packard benefited from relatively healthy corporate
demand in PCs & x86 Servers. However we expect weakness in
Consumer PCs (iPad cannibalization) and Printing coupled with
in-line Services will result in below consensus revenues.
Nonetheless, we expect mix, cost cutting, past restructuring
charges and favorable commodity/ input cost to support margins
and modest EPS upside."
- Brean Murray sees top-line risk for HP from PC revs and laser
printers. "While we expect HP to reiterate its FY12 EPS guidance
of at least $4.00, we note that the Street is at $4.09 and we'd
feel as though HP may have a few more revenue challenges ahead of
itself entering the year." EPS should be 84 cents on revs of
Stay tuned to StreetInsider.com's
section to see our analysis of the highly-anticipated quarterly
results within seconds of their release. You can also check out
Hewlett-Packard's past performance at Streetinsider's
Hewlett-Packard's Income Statement