Hewlett-Packard Co. (
) shares are seeing some extraordinary pressure Wednesday heading
into its second-quarter 2012 results, expected out after the market
close. To access Hewlett-Packard's quarterly webcast,
The Street currently expects Hewlett-Packard to report EPS of 91
cents on revenue of $29.92 billion. Numbers compare with EPS of
$1.24 reported in last year's second quarter and EPS of 92 cents
issued with Hewlett-Packard's first-quarter 2012 report.
Of note, Hewlett-Packard has bested the Street's earnings views by
an average of 3.2 percent over the last six consecutive quarters.
Also, Hewlett-Packard is down 47.7 percent since reporting
quarterly results in the same period last year as macro pressures
and increased competition have played a key role in sending shares
-- as well as peer's shares -- lower.
No better is this displayed than from Hewlett-Packard competitor
Dell, Inc. (Nasdaq: DELL). On Tuesday night, Dell issued a
fiscal first-quarter 2012 miss
amid weakness across most of its segments, from Large Enterprise to
Data from Streetinsider.com's
has eight analysts with a Buy on Hewlett-Packard, 17 at Neutral,
and seven with a Sell-equivalent call. The Street's average price
target is $29.50, ranging from $20 up to $39. Over the last 52-week
time period, Hewlett-Packard has traded within a range of $20.57 to
- Goldman Sachs sees HP meeting guidance calling for EPS of 88
cents to 91 cents. The firms own view calls for EPS of 89 cents
on revs of $30.34 billion.
Despite the lukewarm expectations, Goldman also sees HP needing
to step-up its Imaging and Printing Group game in the back half
of 2012 in order to meet its own guidance calling for EPS of at
Goldman has faith in HP's Personal Systems Group: "We believe
increased competitiveness and some degree of channel fill should
enable HP's PSG unit to post better results than our forecast.
Indeed, IDC PC data showed that the company was able to post
annual unit growth of 3.4% in the March quarter."
For Enterprise, Goldman sees a challenging quarter. Like Dell, HP
may have suffered from execution issues as well as HDD supply
- JPMorgan sees revs of $29.83 and EPS of 93 cents. The firm
said HP is "returning to the old playbook." The firm commented,
"...research indicates that HP is working to rationalize
headcount and SKUs in both PCs and printers. At the same time, HP
has been focused on jumpstarting PC revenue growth. This setup is
similar to the old playbook of boosting total revenue growth with
PCs, while supporting EPS growth with below-therevenue-line
- Deutsche Bank is looking for EPS of 94 cents on revs of
$30.11 billion. (Not picking on one firm, but we'll take the time
to note here that Deutsche was notably above actual Dell
numbers.) Deutsche believes investors should keep an eye on
another round of headcount reductions to the tune of 25,000 to
30,000 employees. Deutsche pointed out previous cuts (about
50,000 under Hurd) did little to improve HPs competitive position
or reduce reliance on troubled businesses.
On HP's outlook, Deutsche noted restructuring efforts should
allow the company to meet its non-GAAP goal of $4 per share, but
cautioned, "the company will face growing headwinds through the
summer relating to soft Consumer PC demand trends/ lack of a
tablet strategy, re-investment/ margin pressure in Services
performance and weak printing."
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
HP's past performance at Streetinsider's
HP's Income Statement