Hewlett-Packard (
HPQ
) shares are slumping Wednesday afternoon heading into the
company's third-quarter earnings release, which is expected out
after the market closes.
Currently, the Street is looking for earnings to slump 11 percent
to 98 cents per share, from $1.10 reported in the same period last
year, on sales of $30.15 billion. Estimize consensus numbers call
for EPS of 99 cents and revs of $30.28 billion.
Traders will likely take a glance at peer Dell's (Nasdaq: DELL)
quarterly report, which was issued nearly 24 hours ago. Dell
reported mixed results with EPS of 50 cents and sales of $14.5
billion. CFO Brian Gladden noted the challenging PC environment and
its business mix was shifting to higher-margin enterprise
solutions.
Analyst View
Data from Streetinsider'c
Ratings Insider
has seven analysts at Buy on Dell, 17 with a Neutral rating, and
eight at Sell.
The Street price target average is $26, ranging from $16 up to $33.
Analyst Comments
Notably, H-P
announced EPS expectations
for the quarter earlier in August. The Company is looking for
non-GAAP EPS of about $1.
- Goldman Sachs expects in-line EPS results. The firm noted
that the raise was encouraging, but lack of transparency behind
the move (where the boost is coming from) adds a layer of
uncertainty. Goldman commented, "Beyond the near term, our
incremental concerns on the services segment, coupled with our
caution on the deteriorating conditions in PCs, servers and
printing, suggests our prior FY2013/FY2014 estimates were too
aggressive."
- Wells Fargo also sees risk to their revenue model amid the
recently updated outlook. The boosted earnings outlook is likely
a reflection of accelerated restructuring efforts and should show
up in the services segment.
Into the numbers, Wells also noted: "We see potential downside to
our PC estimates as we model 60bps yr/yr share loss vs. the
200bps suggested by IDC and Gartner (all else equal, this would
impact revenue by roughly $0.7B). For servers, we model 1% yr/yr
decline, which may be too bullish given our recent checks &
results from peers as well as ongoing pressure in business
critical servers. All else equal, we estimate this would impact
revenue by $0.2B."
Stay tuned to StreetInsider.com's
EPS Insider
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
.
Hewlett-Packard will host a conference call at 2:00pm PT (5:00pm
EDT). Go access the webcast,
click here
.