HP Inc. HPQ is slated to release third-quarter fiscal 2024 results on Aug 28, after market close.
The company expects fiscal third-quarter non-GAAP earnings per share between 78 cents and 92 cents. The Zacks Consensus Estimate for earnings is pegged at 86 cents, indicating no change from the year-ago quarter.
The Zacks Consensus Estimate for revenues is pegged at $13.4 billion, suggesting an improvement of 1.45% from the prior-year quarter.
HP’s earnings surpassed estimates in one of the trailing four quarters while matching on three occasions, the average surprise being 0.31%.
Let’s see how things have shaped up before the announcement.
HP Inc. Price and EPS Surprise
HP Inc. price-eps-surprise | HP Inc. Quote
Factors to Consider
HP’s fiscal third-quarter performance is likely to have been hampered by the volatile external environment that affects the demand for personal computers (PCs). Moreover, weak demand for PCs in China is expected to have hurt the company’s sales in the Personal System division.
High interest rates and protracted inflationary conditions are expected to have negatively impacted the demand for HPQ’s consumer PCs. Furthermore, enterprises are postponing their large IT spending plans due to the weakening global economy amid ongoing macroeconomic and geopolitical issues. This might have hurt HP’s commercial PC sales in the to-be-reported quarter.
However, inventory normalization at channel partners is likely to have more than offset the aforementioned negative impacts.
HP’s Printing division’s sales are likely to have been affected by softened consumer demand in China and an aggressive pricing environment, partially offset by growth in big tank printers.
HP’s third-quarter fiscal 2024 bottom line is likely to have witnessed the benefits of disciplined cost management and a better product mix. Nevertheless, lower revenues, higher commodity costs, unfavorable currency exchange rates, increased investments in innovation and the go-to-market strategy are expected to have partially offset the benefits.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for HP this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
HPQ currently has an Earnings ESP of -0.59% and carries a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases.
Abercrombie & Fitch ANF has an Earnings ESP of +3.50% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Abercrombie & Fitch is slated to report its second-quarter 2024 results on Aug 28. The Zacks Consensus Estimate for the company’s earnings is pegged at $2.13 per share, indicating a significant improvement of 93.6% from the prior-year quarter’s figure of $1.10. Shares of ANF have returned 92.5% in the year-to-date period.
Affirm AFRM has an Earnings ESP of +19.64% and carries a Zacks Rank #3 at present.
The company is scheduled to release fourth-quarter fiscal 2024 results on Aug 28. The Zacks Consensus Estimate for Affirm’s loss is pegged at 45 cents per share, narrower than the prior-year quarter’s loss of 69 cents. Shares of Affirm have plunged 36% in the year-to-date period.
American Eagle Outfitters AEO has an Earnings ESP of +1.97% and carries a Zacks Rank #3 at present.
The company is set to report second-quarter fiscal 2024 results on Aug 29. The Zacks Consensus Estimate for AEO’s earnings is pegged at 38 cents per share, which indicates an improvement of 52% from the year-ago quarter’s reported figure. Shares of American Eagle Outfitters have gained 4.8% in the year-to-date period.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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