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

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HP Inc. HPQ is set to report first-quarter fiscal 2020 results on Feb 24.

For the to-be-reported quarter, HP projects non-GAAP earnings between 53 cents and 56 cents. The Zacks Consensus Estimate is currently pegged at 54 cents,indicating an increase of 3.85% from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate for revenues stands at $14.6 billion, implying a slip of 0.66% from the prior-year quarter’s reported number.

In the trailing four quarters, the company’s earnings surpassed the Zacks Consensus Estimate thrice and matched once, with the positive surprise being 3.21%, on average.

Let’s see, how things have shaped up for the upcoming announcement.

Key Factors to Impact Q1 Results

HP’s first-quarter fiscal 2020 results are expected to benefit from broad-based growth across products and geographies. Buoyant demand in the commercial PC market owing to transition to Microsoft’s MSFT Windows 10 is likely to have remained a key driver.

Notably, per IDC and Gartner’s latest calendar fourth-quarter report, HP held the second spot in PC shipment among the worldwide PC vendors, trailing only Lenovo LNVGY. The company’s shipments grew consecutively, keeping its leading status intact in the United States, EMEA and Latin America, added Gartner.

However, the competitive pricing environment and Intel’s (INTC - Free Report) CPU shortage are likely to have remained dampener for its Personal Systems business. The company expects it to continue into the first half of 2020 and be more impactful in the first quarter.

Moreover, given the softness in the EMEA market, weak supplies revenues are likely to have hurt its Printing business. Further, year-over-year unit market decline in printing, due to the drab home market, might get reflected as a challenge to the stock.

Adverse foreign currency fluctuations and macroeconomic perils remain key concerns this earnings season.

HP Inc. Price and EPS Surprise

HP Inc. Price and EPS Surprise

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

HP currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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