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Hewlett Packard Enterprise (HPE): What's Up for Q1 Earnings?

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Hewlett Packard Enterprise CompanyHPE is set to report first-quarter fiscal 2017 results on Feb 23. The company's last quarter earnings were in-line with the Zacks Consensus Estimate.

Factors to Consider

Since its split from HP Inc. HPQ in Nov 2015, Hewlett Packard Enterprise has made it clear that it will focus on restructuring and realigning its businesses to drive long-term sustainable growth and improve margins.

Hewlett Packard Enterprise has done reasonably well in enterprise class server, storage market, networking and related services, and is focused on these fast-growing and higher-margin businesses.

Hewlett Packard Enterprise's Chief Operating Officer (CEO), Meg Whitman, is looking to reduce the company's large portfolio of non-core businesses that have struggled to maintain their growth trajectory.

The primary motive behind its massive restructuring drive is to reassure investors of the company's sustained focus on improving profitability and returning value to shareholders in the form of dividend and share repurchases.

We believe that the successful deployment of the company's restructuring initiatives and products will have a positive impact on top-line performance in the first quarter.

However, macroeconomic challenges and tepid IT spending remain near-term concerns. Competition from International Business Machines and Oracle add to its woes.

Earnings Whispers

Our proven model does not conclusively show that Hewlett Packard Enterprise is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.

Zacks ESP: Earnings ESP for Hewlett Packard Enterprise is 0.00% since the Most Accurate estimate of 44 cents stands in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Hewlett Packard Enterprise's Zacks Rank #3, when combined with a 0.00% ESP, makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Hewlett Packard Enterprise Company Price and EPS Surprise

Hewlett Packard Enterprise Company Price and EPS Surprise | Hewlett Packard Enterprise Company Quote

Stocks to Consider

Here are a couple of companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Pure Storage Inc. PSTG has an Earnings ESP of +4.17% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

NXP Semiconductors NXPI has an Earnings ESP of +1.53% and a Zacks Rank #3.

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HP Inc. (HPQ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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