Needham & Company Remains Sidelined Following Hewlett-Packard's (HPQ) F2Q Results

Needham & Company maintain a Hold rating on Hewlett-Packard (NYSE: HPQ) following F2Q results. Total revenue reported was 25.4B, slightly below consensus of $25.7B. Non-GAAP EPS of $0.92 was above consensus of $0.85. For F3Q (Jul), HP expects $0.83-0.87 in non-GAAP EPS, compared to consensus estimates of $0.87

Needham & Company analyst Richard Kugele commented on the quarter, saying, "At surface level, it was another quarter (14 out of the last 15) where revenue has fallen yoy with this time in every division (sigh). To be fair, excluding currency headwinds, there were pockets of positives in F2Q, with servers, converged storage, notebooks and enterprise services improving within their categories. Offsetting these product lines were declines in desktop, printing, IT outsourcing, and networking. Looking forward, HP continues marching toward its split with new details gradually emerging (such as more accurate dis-synergy numbers and further layoffs). Based on these numbers our estimated aggregate value for the company of $34-38 is unchanged and we therefore maintain our Hold."

Kugele also added, "The company gave an update on the dis-synergies associated with the split, now expecting a combined $400-450M. However, HP also believes that through additional cost synergies identified, it can offset more than half of that amount in F16 (ended Oct ’16), and fully offset in F17 (with savings reaching full annual run rate at end of F18)."

For an analyst ratings summary and ratings history on Hewlett-Packard click here. For more ratings news on Hewlett-Packard click here.

Shares of Hewlett-Packard closed at $33.83 yesterday.

You May Also Be Interested In

• Lockheed Martin (LMT) Tops Q1 EPS by 53c, Beats on Revenue; Offers FY24 Guidance
• Nomura/Instinet Downgrades Gujarat State Petronet (GUJS:IN) to Reduce
• JPMorgan Upgrades Samsung SDS Co Ltd (018260:KS) to Overweight