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HP Inc. (HPQ) to Report Q4 Earnings: What's in the Offing?
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HP Inc. (HPQ - Free Report) is scheduled to report fourth-quarter fiscal 2023 results on Nov 21.
The company expects fiscal fourth-quarter non-GAAP earnings per share between 85 cents and 97 cents. The Zacks Consensus Estimate for earnings is pegged at 90 cents, indicating an improvement of 5.9% from the year-ago quarter.
The Zacks Consensus Estimate for revenues stands at $13.68 billion, suggesting a decline of 7.6 from the prior-year quarter.
HP’s earnings surpassed the consensus mark in three of the trailing four quarters while matching on one occasion, the average surprise being 2%.
Let’s see how things have shaped up before the announcement.
HP’s fourth-quarter performance is likely to have witnessed a negative impact of the slowdown in consumer demand for PCs and high inventory levels. HP witnessed the robust demand for its PCs during the pandemic-led work-and-learn-from-home wave.
However, the reopening of economies and offices, inflationary pressure and recession concerns have been waning the demand for PCs. Our estimate for Consumer PC’s fourth-quarter revenues is pegged at $2.4 billion.
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. Our estimate for Commercial PC’s fourth-quarter revenues is pegged at $6.68 billion.
We expect HP’s Personal Systems revenues to be approximately $9.08 billion, suggesting a year-over-year decline of 11.6%.
Per the preliminary data released by Gartner in October 2023, PC shipments in the July-September 2023 quarter plunged 9% year over year to 64.3 million units. The latest data compiled by the market research firm depicts the eighth consecutive quarter of a PC sales decline following two successive years of strong year-over-year growth, driven by the pandemic-led increased demand for remote working and online learning tools. (Read more: Global PC Shipment Falls in Q3: Recovery Expected Soon)
However, the third-quarter PC shipment data shows a strong improvement from the second quarter when PC vendors had shipped 59.7 million units. The research firm sees the sequential improvement in PC shipments as an initial sign of stabilization in the PC market.
HP’s Printing division’s sales are likely to have been hampered by softened consumer demand. Our estimate for the segment’s fourth-quarter revenues is pegged at $4.6 billion.
However, HP’s fourth-quarter bottom line is likely to have witnessed the benefits of favorable pricing, disciplined cost management and a better product mix. However, 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 Inc. 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.
Though HP currently carries a Zacks Rank of 3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Synopsys (SNPS - Free Report) , Snowflake (SNOW - Free Report) and Keysight Technologies (KEYS - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Synopsys carries a Zacks Rank #2 and has an Earnings ESP of +0.94%. The company is scheduled to report fourth-quarter fiscal 2023 results on Nov 29. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 4.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Synopsys’ fourth-quarter earnings is pegged at $3.04 per share, indicating a year-over-year increase of 59.2%. The consensus mark for revenues stands at $1.58 billion, suggesting a year-over-year surge of 23.3%.
Snowflake is slated to report third-quarter fiscal 2024 results on Nov 29. The company has a Zacks Rank #2 and an Earnings ESP of +67.33% at present. Snowflake’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 244.5%.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 16 cents per share, suggesting an increase of 45.6% from the year-ago quarter’s earnings of 11 cents. Snowflake’s quarterly revenues are estimated to grow 27.6% year over year to $710.5 million.
Keysight carries a Zacks Rank #3 and has an Earnings ESP of +0.18%. The company is scheduled to report fourth-quarter fiscal 2023 results on Nov 20. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 8.3%.
The Zacks Consensus Estimate for Keysight’s fourth-quarter earnings stands at $1.87 per share, indicating a year-over-year decline of 12.6%. It is estimated to report revenues of $1.3 billion, which suggests a decrease of approximately 10% from the year-ago quarter.
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HP Inc. (HPQ) to Report Q4 Earnings: What's in the Offing?
HP Inc. (HPQ - Free Report) is scheduled to report fourth-quarter fiscal 2023 results on Nov 21.
The company expects fiscal fourth-quarter non-GAAP earnings per share between 85 cents and 97 cents. The Zacks Consensus Estimate for earnings is pegged at 90 cents, indicating an improvement of 5.9% from the year-ago quarter.
The Zacks Consensus Estimate for revenues stands at $13.68 billion, suggesting a decline of 7.6 from the prior-year quarter.
HP’s earnings surpassed the consensus mark in three of the trailing four quarters while matching on one occasion, the average surprise being 2%.
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 fourth-quarter performance is likely to have witnessed a negative impact of the slowdown in consumer demand for PCs and high inventory levels. HP witnessed the robust demand for its PCs during the pandemic-led work-and-learn-from-home wave.
However, the reopening of economies and offices, inflationary pressure and recession concerns have been waning the demand for PCs. Our estimate for Consumer PC’s fourth-quarter revenues is pegged at $2.4 billion.
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. Our estimate for Commercial PC’s fourth-quarter revenues is pegged at $6.68 billion.
We expect HP’s Personal Systems revenues to be approximately $9.08 billion, suggesting a year-over-year decline of 11.6%.
Per the preliminary data released by Gartner in October 2023, PC shipments in the July-September 2023 quarter plunged 9% year over year to 64.3 million units. The latest data compiled by the market research firm depicts the eighth consecutive quarter of a PC sales decline following two successive years of strong year-over-year growth, driven by the pandemic-led increased demand for remote working and online learning tools. (Read more: Global PC Shipment Falls in Q3: Recovery Expected Soon)
However, the third-quarter PC shipment data shows a strong improvement from the second quarter when PC vendors had shipped 59.7 million units. The research firm sees the sequential improvement in PC shipments as an initial sign of stabilization in the PC market.
HP’s Printing division’s sales are likely to have been hampered by softened consumer demand. Our estimate for the segment’s fourth-quarter revenues is pegged at $4.6 billion.
However, HP’s fourth-quarter bottom line is likely to have witnessed the benefits of favorable pricing, disciplined cost management and a better product mix. However, 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 Inc. 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.
Though HP currently carries a Zacks Rank of 3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Synopsys (SNPS - Free Report) , Snowflake (SNOW - Free Report) and Keysight Technologies (KEYS - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Synopsys carries a Zacks Rank #2 and has an Earnings ESP of +0.94%. The company is scheduled to report fourth-quarter fiscal 2023 results on Nov 29. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 4.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Synopsys’ fourth-quarter earnings is pegged at $3.04 per share, indicating a year-over-year increase of 59.2%. The consensus mark for revenues stands at $1.58 billion, suggesting a year-over-year surge of 23.3%.
Snowflake is slated to report third-quarter fiscal 2024 results on Nov 29. The company has a Zacks Rank #2 and an Earnings ESP of +67.33% at present. Snowflake’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 244.5%.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 16 cents per share, suggesting an increase of 45.6% from the year-ago quarter’s earnings of 11 cents. Snowflake’s quarterly revenues are estimated to grow 27.6% year over year to $710.5 million.
Keysight carries a Zacks Rank #3 and has an Earnings ESP of +0.18%. The company is scheduled to report fourth-quarter fiscal 2023 results on Nov 20. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 8.3%.
The Zacks Consensus Estimate for Keysight’s fourth-quarter earnings stands at $1.87 per share, indicating a year-over-year decline of 12.6%. It is estimated to report revenues of $1.3 billion, which suggests a decrease of approximately 10% from the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.