Barclays on U.S. IT Hardware: Signs of Near-Term Shortages Emerging in Laser Printing
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Today's Overall Ratings:
Up: 10 | Down: 6 | New: 33
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Barclays on U.S. IT Hardware: Signs of Near-Term Shortages Emerging in Laser Printing
Barclays analyst, Ben A. Reitzes, said, "According to our colleague, Canon (NYSE: CAJ) and Fuji Xerox could be facing shortages of toner material next quarter. Canon makes all of HP's laser printer engines and toners. Fuji Xerox makes the majority of Xerox's laser printer/copier engines (midrange to low-end and color). Given new systems typically need to ship with toner supplies, production of copiers/printers could be impacted in 2Q11 - even if production facilities are located in China. As a result of this possibility, we believe it is prudent to adjust estimates for HP (NYSE: HPQ) and Xerox (NYSE: XRX)- taking sales out of C2Q11 and pushing it into future periods."
(Side Note From Reitzes - While supply chain issues for toner materials bear monitoring, we believe sales will snap back eventually and any concern-driven dips could represent a buying opportunity. Our estimates for the pace in the snapback of sales may prove conservative. We have not cut our 2012 estimates)
HP - "For 2Q11 we now estimate EPS of $1.19 (from $1.20) based on revenues of $31.2 billion (from $31.5 billion). For 3Q11 we now estimate EPS of $1.20 (from $1.23) based on revenues of $30.9 billion (from $31.6 billion). However, we now believe some revenues could be pushed into FY12. For 2012, we continue to maintain our estimate of $5.68 based on revenue of $134.8 billion."
XRX - "For 1Q11 we now estimate EPS of $0.21 (from $0.22) based on revenues of $5.37 billion (from $5.44 billion). For 2Q11 we now estimate EPS of $0.24 (from $0.26) based on revenues of $5.52 billion (from $5.67 billion). For 3Q11 we now estimate EPS of $0.26 (from $0.27) based on revenues of $5.55 billion (from $5.60 billion). However, we now believe some revenues could be pushed into 2012. For 2012, we maintain our estimate of $1.28 based on revenue of $23.76 billion. We do not believe that Xerox's cash flow will be materially impacted by these estimate adjustments."
Barclays analyst, Ben A. Reitzes, said, "According to our colleague, Canon (NYSE: CAJ) and Fuji Xerox could be facing shortages of toner material next quarter. Canon makes all of HP's laser printer engines and toners. Fuji Xerox makes the majority of Xerox's laser printer/copier engines (midrange to low-end and color). Given new systems typically need to ship with toner supplies, production of copiers/printers could be impacted in 2Q11 - even if production facilities are located in China. As a result of this possibility, we believe it is prudent to adjust estimates for HP (NYSE: HPQ) and Xerox (NYSE: XRX)- taking sales out of C2Q11 and pushing it into future periods."
(Side Note From Reitzes - While supply chain issues for toner materials bear monitoring, we believe sales will snap back eventually and any concern-driven dips could represent a buying opportunity. Our estimates for the pace in the snapback of sales may prove conservative. We have not cut our 2012 estimates)
HP - "For 2Q11 we now estimate EPS of $1.19 (from $1.20) based on revenues of $31.2 billion (from $31.5 billion). For 3Q11 we now estimate EPS of $1.20 (from $1.23) based on revenues of $30.9 billion (from $31.6 billion). However, we now believe some revenues could be pushed into FY12. For 2012, we continue to maintain our estimate of $5.68 based on revenue of $134.8 billion."
XRX - "For 1Q11 we now estimate EPS of $0.21 (from $0.22) based on revenues of $5.37 billion (from $5.44 billion). For 2Q11 we now estimate EPS of $0.24 (from $0.26) based on revenues of $5.52 billion (from $5.67 billion). For 3Q11 we now estimate EPS of $0.26 (from $0.27) based on revenues of $5.55 billion (from $5.60 billion). However, we now believe some revenues could be pushed into 2012. For 2012, we maintain our estimate of $1.28 based on revenue of $23.76 billion. We do not believe that Xerox's cash flow will be materially impacted by these estimate adjustments."
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