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HP (HPQ) to Post Q2 Earnings: What's in Store for the Stock?
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HP Inc. (HPQ - Free Report) is set to report second-quarter fiscal 2020 results on May 27.
For the to-be-reported quarter, HP projects non-GAAP earnings between 49 cents and 53 cents. The Zacks Consensus Estimate is currently pegged at 45 cents, indicating a decline of 15.1% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for revenues stands at $12.9 billion, suggesting a year-over-year fall of 8.2%.
The company’s earnings surpassed estimates in all of the trailing four quarters, the positive surprise being 8.3%, on average.
Let’s see how things have shaped up for the upcoming announcement.
Key Factors
HP’s fiscal second-quarter performance is expected to have been negatively impacted by the coronavirus outbreak. The company had also stated during its fiscal first-quarter earnings conference call that the pandemic would hurt its revenues, earnings and cash flows in the second quarter.
Per the latest data compiled by IDC, global PC shipments fell sharply year over year in the fiscal first quarter (January-March) despite a demand surge due to the shift toward the work-and-learn from home trend amid the coronavirus-led global lockdown.
Lockdown measures to contain the spread of coronavirus in China, the world’s largest supplier of PCs, have significantly delayed productions as well as created logistic and labor issues, resulting in a global PC shipment decline.
The research firm noted that supply was at par with last year this January. However, the extended closure of factories in China in February and the slow resumption of production toward the end of the March-end quarter resulted in a reduction in PC supplies.
Per the data compiled by IDC, HP witnessed a 13.8% year-over-year decline in PC shipments during the January-March quarter. The firm’s global market share also shrunk 100 basis points year over year to 22%.
Furthermore, the competitive pricing environment and Intel’s CPU shortage are likely to have been deterrents for its Personal Systems business. Additionally, given the softness in the EMEA market, weak supplies revenues are likely to have hurt its Printing business.
Adverse foreign-currency fluctuations and macroeconomic perils remain key concerns this earnings season.
What Our Model Says
Our proven model does not predict an earnings beat for HP this season.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. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
HP currently carries a Zacks Rank of 3 and has an Earnings ESP of -12.69%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:
CrowdStrike Holdings Inc. (CRWD - Free Report) has an Earnings ESP of +3.57% and flaunts a Zacks Rank of 1 currently.
NVIDIA Corporation (NVDA - Free Report) has an Earnings ESP of +0.15% and carries a Zacks Rank 2, at present.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
HP (HPQ) to Post Q2 Earnings: What's in Store for the Stock?
HP Inc. (HPQ - Free Report) is set to report second-quarter fiscal 2020 results on May 27.
For the to-be-reported quarter, HP projects non-GAAP earnings between 49 cents and 53 cents. The Zacks Consensus Estimate is currently pegged at 45 cents, indicating a decline of 15.1% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for revenues stands at $12.9 billion, suggesting a year-over-year fall of 8.2%.
The company’s earnings surpassed estimates in all of the trailing four quarters, the positive surprise being 8.3%, on average.
HP Inc. Price and Consensus
HP Inc. price-consensus-chart | HP Inc. Quote
Let’s see how things have shaped up for the upcoming announcement.
Key Factors
HP’s fiscal second-quarter performance is expected to have been negatively impacted by the coronavirus outbreak. The company had also stated during its fiscal first-quarter earnings conference call that the pandemic would hurt its revenues, earnings and cash flows in the second quarter.
Per the latest data compiled by IDC, global PC shipments fell sharply year over year in the fiscal first quarter (January-March) despite a demand surge due to the shift toward the work-and-learn from home trend amid the coronavirus-led global lockdown.
Lockdown measures to contain the spread of coronavirus in China, the world’s largest supplier of PCs, have significantly delayed productions as well as created logistic and labor issues, resulting in a global PC shipment decline.
The research firm noted that supply was at par with last year this January. However, the extended closure of factories in China in February and the slow resumption of production toward the end of the March-end quarter resulted in a reduction in PC supplies.
Per the data compiled by IDC, HP witnessed a 13.8% year-over-year decline in PC shipments during the January-March quarter. The firm’s global market share also shrunk 100 basis points year over year to 22%.
Furthermore, the competitive pricing environment and Intel’s CPU shortage are likely to have been deterrents for its Personal Systems business. Additionally, given the softness in the EMEA market, weak supplies revenues are likely to have hurt its Printing business.
Adverse foreign-currency fluctuations and macroeconomic perils remain key concerns this earnings season.
What Our Model Says
Our proven model does not predict an earnings beat for HP this season.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. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
HP currently carries a Zacks Rank of 3 and has an Earnings ESP of -12.69%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:
Anaplan, Inc. has an Earnings ESP of +3.70% and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
CrowdStrike Holdings Inc. (CRWD - Free Report) has an Earnings ESP of +3.57% and flaunts a Zacks Rank of 1 currently.
NVIDIA Corporation (NVDA - Free Report) has an Earnings ESP of +0.15% and carries a Zacks Rank 2, at present.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>