Hewlett Packard Enterprise ( HPE Quick Quote HPE - Free Report) is slated to report fourth-quarter fiscal 2023 results after market close on Nov 28.
For the fourth quarter, Hewlett Packard projects non-GAAP earnings per share between 48 cents and 52 cents. The Zacks Consensus Estimate for earnings is pegged at 50 cents, indicating a year-over-year decline of 12.28%.
HPE expects fourth-quarter revenues between $7.2 billion and $7.5 billion. The consensus mark for quarterly revenues is pegged at $7.35 billion, suggesting a decrease of 6.7% from the year-ago period.
The company’s earnings surpassed the Zacks Consensus Estimate in three of the preceding four quarters while matching the same on one occasion, the average surprise being 9.6%.
Hewlett Packard’s fiscal fourth-quarter performance 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. Notably, HPE’s total as-a-service order value crossed the $10 billion mark in second-quarter fiscal 2023, while the company shifted its business to a high-margin software-intensive as-a-service offering.
Our estimate for Hewlett Packard’s fourth-quarter revenues in its High-Performance Computing & Artificial Intelligence and Intelligent Edge segments is pegged at $859.8 million and $1.36 billion, respectively.
Accelerated digital transformation and higher demand for cloud networking due to the continuous hybrid working trend are likely to have contributed to the fourth-quarter top line. The solid adoption of the Aruba 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. In the third-quarter earnings report, it was highlighted that GreenLake saw a remarkable 122% year-over-year increase in orders.
Our estimate for fourth-quarter revenues in HPE’s Compute and Storage segments is pegged at $2.97 billion and $1.11 billion, respectively.
Hewlett Packard’s gross margin is likely to have improved during the quarter, driven by a strong pricing discipline that is likely to have somewhat mitigated logistic costs, the benefits of an improving supply-chain base, a positive mix shift to high-margin software-rich businesses, cost takeouts and automation.
However, HPE expects to continue facing higher commodity costs and foreign-exchange headwinds for the next few quarters. These factors are likely to have negatively impacted its sales growth and profitability in the quarter under review.
What Our Model States
Our proven model does not conclusively predict an earnings beat for Hewlett Packard 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. But that’s not the case here.
Hewlett Packard has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. 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,
Micron Technology ( MU Quick Quote MU - Free Report) , Snowflake ( SNOW Quick Quote SNOW - Free Report) and Marvell Technology ( MRVL Quick Quote MRVL - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Micron carries a Zacks Rank #3 and has an Earnings ESP of +26.69% at present. The company is scheduled to report first-quarter fiscal 2024 results on Dec 20. Its earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing on two occasions, the average negative surprise being 67.7%. You can see
. the complete list of today’s Zacks #1 Rank stocks here
The Zacks Consensus Estimate for Micron’s first-quarter earnings is pegged at a loss of $1.02 per share, wider than the year-ago quarter’s loss of 4 cents. The consensus mark for revenues is pegged at $4.43 billion, suggesting a year-over-year increase of 8.5%.
Snowflake has a Zacks Rank #2 and an Earnings ESP of +67.33% at present. The company is slated to report third-quarter fiscal 2024 results on Nov 29. SNOW’s earnings beat the Zacks Consensus Estimate in each of 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 45.5% 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.
Marvell carries a Zacks Rank #3 and has an Earnings ESP of +0.18% at present. The company is scheduled to report third-quarter fiscal 2024 results on Nov 30. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing on one occasion, with the average surprise being 1.7%.
The Zacks Consensus Estimate for Marvell’s third-quarter earnings is pinned at 40 cents per share, indicating a year-over-year decline of 29.8%. It is estimated to report revenues of $1.4 billion, which suggests a decrease of approximately 8.9% from the year-ago quarter.
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