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Factors to Note Ahead of HP's (HPQ) Q4 Earnings Release

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HP Inc. (HPQ - Free Report) is slated to report fourth-quarter fiscal 2021 results on Nov 23.

The company expects fiscal fourth-quarter non-GAAP earnings per share between 84 cents and 90 cents. The Zacks Consensus Estimate for earnings is pegged at 88 cents, indicating an improvement of 41.9% from the year-ago quarter.

The Zacks Consensus Estimate for revenues stands at $15.36 billion, suggesting growth of 0.7% from the prior-year quarter.

HP’s earnings surpassed the consensus mark in each of the trailing four quarters, the average surprise being 21.1%.

Let’s see how things have shaped up for HP before this announcement.

HP Inc. Price and EPS Surprise HP Inc. Price and EPS Surprise

HP Inc. price-eps-surprise | HP Inc. Quote

Factors Likely to Impact Q4 Results

HP’s fourth-quarter performance is likely to have benefited from solid demand for personal systems, driven by the remote-working and online-learning trends amid the COVID-19 pandemic. Services like HP Provisioning Connect that is aimed at setting up and supporting devices in employees’ homes and office might have driven the company’s sales in the quarter under review.

The HyperX acquisition is expected to have contributed to HP’s Personal System business performance in the to-be-reported quarter. Chromebooks, which are priced lower than other PC portfolios, might have raised revenue shares on account of constant and significant technology demand in the education market.

The personal computers and printers’ manufacturer’s printing segment is likely to have gained from strong demand for consumer printers and a continued improvement in the commercial end market as organizations worldwide are slowly resuming their in-premise operations. The global launch of the smartest printing system — HP+ — in late April this year has broadened the California-based company’s customer reach, which may have boosted the printers’ sales in the to-be-reported quarter.

However, HP anticipates industry-wide components’ supply constraints to impact its ability to meet the demand for both PCs and printers. Also, the resurgence in COVID-19 cases due to the emergence of the Delta variant is expected to have caused some manufacturing, port and logistics disruptions during the fiscal fourth quarter. These factors are expected to have curbed HPQ’s revenue growth in the quarter under review.

What Our Model Says

Our proven model does not predict an earnings beat for HP this time. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Although HP currently carries a Zacks Rank of 3, it has an Earnings ESP of 0.00%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combinations

Per our model, Best Buy (BBY - Free Report) , PVH Corporation (PVH - Free Report) and Nordstrom (JWN - Free Report) have  the right combination of elements to post an earnings beat in their upcoming releases.

Best Buy carries a Zacks Rank #2 and has an Earnings ESP of +23.14%. The company is scheduled to report third-quarter fiscal 2022 results on Nov 23. BBY earnings have surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 31.9%.

The Zacks Consensus Estimate for Best Buy’s third-quarter earnings is pegged at $1.93 per share, representing a year-over-year decline of 6.3%. The consensus mark for revenues is pinned at $11.65 billion, reflecting a year-over-year decrease of 1.8%.

PVH Corporation is slated to report third-quarter fiscal 2022 results on Dec 1. The PVH stock carries a Zacks Rank #2 and has an Earnings ESP of +12.38%, at present. The company’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missed the same on one occasion, the average surprise being 177.5%.

The Zacks Consensus Estimate for quarterly earnings is pegged at $2.06 per share, suggesting a year-over-year improvement of 56.1%. PVH’s quarterly revenues are estimated to increase 13.2% year over year to $2.40 billion.

Nordstrom currently carries a Zacks Rank #3 and has an Earnings ESP of +0.40%. The leading fashion specialty retailer is scheduled to report its third-quarter fiscal 2022 results on Nov 23. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters while missed the same once, the average surprise being 557.3%.

The Zacks Consensus Estimate for Nordstrom’s third-quarter earnings is pinned at 56 cents per share, reflecting a year-over-year jump of 154.5%. JWN is estimated to report revenues of $3.54 billion, which suggests an increase of 14.5% from the year-ago quarter.


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