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HP Inc. (HPQ) to Report Q1 Earnings: What's in the Cards?

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HP Inc. (HPQ - Free Report) is scheduled to report first-quarter fiscal 2024 results on Feb 28.

The company expects fiscal first-quarter non-GAAP earnings per share between 76 cents and 86 cents. The Zacks Consensus Estimate for earnings is pegged at 82 cents, indicating an improvement of 9.3% from the year-ago quarter.

The Zacks Consensus Estimate for revenues stands at $13.61 billion, suggesting a decline of 1.6% from the prior-year quarter.

HP’s earnings surpassed the consensus mark in two of the trailing four quarters while matching on two occasions, the average surprise being 1.7%.

Let’s see how things have shaped up before the announcement.

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

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

Factors to Consider

HP’s first-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. The Zacks Consensus Estimate for Consumer PC’s first-quarter revenues is pegged at $3.02 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. The consensus mark for Commercial PC’s first-quarter revenues is pegged at $6.22 billion.

However, inventory normalization at channel partners is likely to have somewhat offset the aforementioned negative impacts. The Zacks Consensus Estimate for HP’s Personal Systems revenues stands at approximately $9.25 billion, almost flat from the year-ago quarter’s sales of $9.22 billion.

HP’s Printing division’s sales are likely to have been hampered by softened consumer demand. The consensus mark for the segment’s first-quarter revenues is pegged at $4.37 billion, down from the year-ago quarter’s $4.61 billion.

However, HP’s first-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, SEMrush (SEMR - Free Report) , Guidewire Software (GWRE - Free Report) and JD.com (JD - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.

SEMrush carries a Zacks Rank #2 and has an Earnings ESP of +23.08%. The company is scheduled to report fourth-quarter 2023 results on Mar 4. Its bottom-line result surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 112.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for SEMrush’s fourth-quarter bottom line is pegged at earnings of 3 cents per share, indicating a robust improvement from the year-ago quarter’s loss of 8 cents. The consensus mark for revenues stands at $83.2 million, calling for a year-over-year increase of 20.9%.

Guidewire Software is slated to report second-quarter fiscal 2024 results on Mar 7. The company has a Zacks Rank #3 and an Earnings ESP of +4.76% at present. Guidewire Software’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being -42.22%.

The Zacks Consensus Estimate for second-quarter earnings is pegged at 21 cents per share, suggesting a strong improvement from the year-ago quarter’s loss of 21 cents. Guidewire Software’s quarterly revenues are estimated to improve 3.6% to $240.9 million.

JD.com carries a Zacks Rank #3 and has an Earnings ESP of +0.78%. The company is scheduled to report fourth-quarter 2023 results on Mar 6. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 14.5%.

The Zacks Consensus Estimate for JD.com’s fourth-quarter earnings stands at 65 cents per share, indicating a year-over-year decline of 7.1%. It is estimated to report revenues of $42.56 billion, which implies a decrease of approximately 0.7% from the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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