Hewlett-Packard Co. ( HPQ ) is set to report
first-quarter 2013 results after the bell today, Feb 21. Last
quarter, it posted no positive earnings surprise. Let's see how
things are shaping up for this announcement.
Growth Factors This Past Quarter
All PC markers are currently seeing a slowdown and
Hewlett-Packard is no different, as the PC business of the company
has been affected by the increasing popularity of tablets and other
Hewlett-Packard is going through a strategic and operational
transformation process. So in order to strengthen its business
model, the company has been implementing new restructuring plans
over the last four quarters. It is yet to be seen whether these
initiatives can help the reverse the negative revenue growth trend
it has seen in the last few quarters. However, the actions may be
expected to have a positive impact on margin and EPS performance
throughout the year.
Although the company reported a revenue and gross margin
decline, which resulted in a net loss, proper cost control and
strategic initiatives can help the company improve its financial
The Zacks Consensus Estimate for the first quarter of 2013
stands at 71 cents, while that for fiscal 2013 stands at $3.30.
Hewlett-Packard reported in line with its estimate over the last
three quarters, so there was no earnings surprise.
There were no revisions in estimates over the last 30 days.
However, over the last 60 days, one estimate moved up, while
another moved in the opposite direction. However, this was not
enough to move the Zacks Consensus Estimate in either
Hewlett-Packard shares carry a Zacks Rank #3 (Hold).
The sell rated stocks (#4 and #5) should never be considered
going into an earnings announcement, especially when the company is
seeing negative estimate revisions momentum.
Other Stocks to Consider
Our model states that a stock needs to have both a positive
earnings ESP (Read: Zacks Earnings ESP: A Better Method ) and a
Zacks Rank #1, #2 or #3 to beat earnings estimates. You could,
therefore, consider other stocks instead like::
Symantec Corp. ( SYMC ) with a Zacks
Rank #1 (Strong Buy), having a TTM ESP of 1.33%.
CA Inc. ( CA ) with a Zacks Rank
#2 (Buy), and ESP of 0.83%.
Advent Software ( ADVS ) has a Zacks
Rank #1 (Buy) and ESP of 4.55%.ADVENT SOFTWARE (ADVS): Free Stock Analysis
ReportCA INC (CA): Free Stock Analysis ReportHEWLETT PACKARD (HPQ): Free Stock Analysis
ReportSYMANTEC CORP (SYMC): Free Stock Analysis
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