AmTech Previews Hewlett-Packard (HPQ) Q2 Earnings

American Technology Research issued a research report this morning previewing Hewlett-Packard's (NYSE: HPQ) Q2 earnings, expected out tomorrow, May 20, after the close. Notably, Hewlett-Packard pre-announced strong Q2 results on May 13, also raising its full year guidance. AmTech reiterates its Buy rating and $56 price target on shares of Hewlett-Packard.

The firm said investors will likely be focused on HPQ's "margins, business unit performance, and opportunities with EDS." AmTech is estimating that operating margins rose 20 basis points over Q2, to 10.1%, while gross margins rose 10 basis points quarter-over-quarter, to 24.6%.

AmTech calls the EDS acquisition "a strong fit with complementary offerings" including "room for significant operating leverage." Assuming a slight loss of revenue and no cost improvements, the firm believes the acquisition will be accretive to Hewlett-Packard's earnings by $0.05-$0.06. Assuming more optimistic parameters, AmTech sees HPQ's earnings increasing $0.27-$0.32 as a result of the acquisition.

Hewlett-Packard Company provides various products, technologies, software, solutions, and services worldwide.

You May Also Be Interested In

• Dollarama Inc. (DOL:CN) (DLMAF) PT Raised to Cdn$231 at Bernstein SocGen
• BofA Securities Starts Dollarama Inc. (DOL:CN) (DLMAF) at Buy
• Casey's General Stores (CASY) PT Raised to $975 at Stephens