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Is a Beat Likely for Hewlett Packard (HPE) This Earnings Season?
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Hewlett Packard Enterprise (HPE - Free Report) is likely to beat expectations when it reports third-quarter fiscal 2022 results after market close on Aug 30. In the last reported quarter, HPE delivered non-GAAP earnings of 44 cents per share, which beat the Zacks Consensus Estimate by 2.2% but were two cents lower than the prior-year quarter’s earnings of 46 cents.
The company’s earnings surpassed estimates thrice in the trailing four quarters and missed the same on one occasion, the average beat being 7.8%.
For the third quarter, Hewlett Packard projects non-GAAP earnings between 44 cents and 54 cents per share. The Zacks Consensus Estimate for earnings is pegged at 48 cents, indicating year-over-year growth of 2.13%. The consensus mark for quarterly revenues stands at $6.97 billion, suggesting an increase of 1.04% from the year-ago period.
Hewlett Packard Enterprise Company Price and EPS Surprise
Hewlett Packard’s fiscal third-quarter performance is likely to have gained from increased investments in data center infrastructure, modernization of business applications and IT operations. The company is likely to have benefited from strong momentum in the as-a-service platform and significant contributions from growth businesses, such as high-performance computing & modular cooling systems and Intelligent Edge.
In the second quarter, Intelligent Edge segment orders grew more than 35% year over year, which was reflected in the top-line growth of 8% from this segment.
Further, accelerated digital transformation and higher demand for cloud networking due to the ongoing remote working wave are likely to have contributed to the third-quarter top line. Solid adoption of Aruba ESP (Edge Services Platform), which provides edge-to-cloud connectivity as a service, and its cloud services arm, HPE GreenLake, might have driven the to-be-reported quarter’s revenues.
Hewlett Packard’s gross margin is likely to have improved during the quarter, driven by a strong pricing discipline that would manage rising supply & logistic costs, the benefits from a positive mix shift toward high-margin, software-rich businesses, cost takeouts and automation.
However, HPE expects to continue facing component shortages, higher commodity costs and increased shipping fees for the next few quarters. These factors are likely to have negatively impacted its sales growth and profitability in the quarter under review.
Besides, foreign-exchange headwinds are expected to have been concerns along with several organizations shifting to cloud computing due to their maintenance-free and cost-effective structure compared with standalone servers.
Earnings Whispers
Our proven model predicts an earnings beat for HPE this time. 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, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +1.05%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: HPE carries a Zacks Rank #3.
Other Stocks With Favorable Combination
Per our model, Albany International (AIN - Free Report) , NOV (NOV - Free Report) and Murphy USA (MUSA - Free Report) also have the right combination of elements to post an earnings beat in their upcoming releases.
Albany has a Zacks Rank #1 and an Earnings ESP of +1.10%. The company is expected to report third-quarter 2022 results on Oct 24. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 31.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the third-quarter earnings of Albany is pegged at 84 cents per share, suggesting year-over-year growth of 1.20%. The consensus mark for revenues stands at $244.7 million, indicating growth of 5.3% year over year.
NOV is expected to report third-quarter 2022 results on Oct 25. The stock has a Zacks Rank #1 and an Earnings ESP of +2.77%. Its earnings beat the Zacks Consensus Estimate in only one of the preceding four quarters and missed thrice, the average surprise being 1.46%.
The Zacks Consensus Estimate for NOV’s quarterly earnings stands at 16 cents per share, suggesting a year-over-year decline of 11%. Its quarterly revenues are estimated to decrease 34.9% year over year to $1.81 billion.
Murphy USA has a Zacks Rank #1 and an Earnings ESP of +14.60%. The company is likely to report its third-quarter 2022 results on Oct 26. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 49%.
The Zacks Consensus Estimate for Murphy’s third-quarter earnings is pegged at $5.62 per share, suggesting year-over-year growth of 41.2%. The consensus mark for revenues stands at $6.22 billion, indicating a year-over-year improvement of 35.1%.
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Is a Beat Likely for Hewlett Packard (HPE) This Earnings Season?
Hewlett Packard Enterprise (HPE - Free Report) is likely to beat expectations when it reports third-quarter fiscal 2022 results after market close on Aug 30. In the last reported quarter, HPE delivered non-GAAP earnings of 44 cents per share, which beat the Zacks Consensus Estimate by 2.2% but were two cents lower than the prior-year quarter’s earnings of 46 cents.
The company’s earnings surpassed estimates thrice in the trailing four quarters and missed the same on one occasion, the average beat being 7.8%.
For the third quarter, Hewlett Packard projects non-GAAP earnings between 44 cents and 54 cents per share. The Zacks Consensus Estimate for earnings is pegged at 48 cents, indicating year-over-year growth of 2.13%.
The consensus mark for quarterly revenues stands at $6.97 billion, suggesting an increase of 1.04% from the year-ago period.
Hewlett Packard Enterprise Company Price and EPS Surprise
Hewlett Packard Enterprise Company price-eps-surprise | Hewlett Packard Enterprise Company Quote
Factors to Note Ahead of Q3 Results
Hewlett Packard’s fiscal third-quarter performance is likely to have gained from increased investments in data center infrastructure, modernization of business applications and IT operations. The company is likely to have benefited from strong momentum in the as-a-service platform and significant contributions from growth businesses, such as high-performance computing & modular cooling systems and Intelligent Edge.
In the second quarter, Intelligent Edge segment orders grew more than 35% year over year, which was reflected in the top-line growth of 8% from this segment.
Further, accelerated digital transformation and higher demand for cloud networking due to the ongoing remote working wave are likely to have contributed to the third-quarter top line. Solid adoption of Aruba ESP (Edge Services Platform), which provides edge-to-cloud connectivity as a service, and its cloud services arm, HPE GreenLake, might have driven the to-be-reported quarter’s revenues.
Hewlett Packard’s gross margin is likely to have improved during the quarter, driven by a strong pricing discipline that would manage rising supply & logistic costs, the benefits from a positive mix shift toward high-margin, software-rich businesses, cost takeouts and automation.
However, HPE expects to continue facing component shortages, higher commodity costs and increased shipping fees for the next few quarters. These factors are likely to have negatively impacted its sales growth and profitability in the quarter under review.
Besides, foreign-exchange headwinds are expected to have been concerns along with several organizations shifting to cloud computing due to their maintenance-free and cost-effective structure compared with standalone servers.
Earnings Whispers
Our proven model predicts an earnings beat for HPE this time. 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, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +1.05%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: HPE carries a Zacks Rank #3.
Other Stocks With Favorable Combination
Per our model, Albany International (AIN - Free Report) , NOV (NOV - Free Report) and Murphy USA (MUSA - Free Report) also have the right combination of elements to post an earnings beat in their upcoming releases.
Albany has a Zacks Rank #1 and an Earnings ESP of +1.10%. The company is expected to report third-quarter 2022 results on Oct 24. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 31.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the third-quarter earnings of Albany is pegged at 84 cents per share, suggesting year-over-year growth of 1.20%. The consensus mark for revenues stands at $244.7 million, indicating growth of 5.3% year over year.
NOV is expected to report third-quarter 2022 results on Oct 25. The stock has a Zacks Rank #1 and an Earnings ESP of +2.77%. Its earnings beat the Zacks Consensus Estimate in only one of the preceding four quarters and missed thrice, the average surprise being 1.46%.
The Zacks Consensus Estimate for NOV’s quarterly earnings stands at 16 cents per share, suggesting a year-over-year decline of 11%. Its quarterly revenues are estimated to decrease 34.9% year over year to $1.81 billion.
Murphy USA has a Zacks Rank #1 and an Earnings ESP of +14.60%. The company is likely to report its third-quarter 2022 results on Oct 26. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 49%.
The Zacks Consensus Estimate for Murphy’s third-quarter earnings is pegged at $5.62 per share, suggesting year-over-year growth of 41.2%. The consensus mark for revenues stands at $6.22 billion, indicating a year-over-year improvement of 35.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.