H-P (HPQ) Q1 Preview: It's All About Tablets, CEOs, and Servers
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Price: $29.47 --0%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 4.1%
Revenue Growth %: +2.9%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 4.1%
Revenue Growth %: +2.9%
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Hewlett-Packard Company (NYSE: HPQ) is trading lower today, ahead of the company's first quarter earnings report, expected out after the market closes today. Shares are down 1.4% this afternoon.
HPQ is expected to report EPS of $1.29 on revs of $32.95 billion. Last quarter, the Palo Alto, CA-based computer giant reported EPS of $1.33 on revs of $33.3 billion, beating out consensus views calling for EPS of $1.27 with revs of $32.75 billion. Looking back one year, HPQ produced EPS of $1.10, excluding certain items, with revs of $31.2 billion, both topping estimates.
Shares gained 7.7% through the quarter to $45.69 at the end of January. The stock is up 5% since then, and finished 2010 about 19% lower.
A simple valuation puts Hewlett-Packard with a forward P/E of 8.4x FY12 EPS estimates, compared to 8.6x for Dell, Inc. (Nasdaq: DELL) and 11.2x for International Business Machines (NYSE: IBM).
Data from Bloomberg has 28 analysts with a Buy on HPQ, 8 with a hold, and two suggesting to Sell. The analyst price target average is $55.20, with a high of $70 and low of $38. Shares have traded in a range of $54.75 - $37.32 over the last 52-weeks.
Summary
Last quarter, HPQ guided to Q111 EPS of $1.29 - $1.30 with sales of $32.98 - $33 billion.
Last week, rival Dell reported their earnings, which was stronger than many analysts had been expecting. EPS for Dell came in at $0.53 with revs of $15.7 billion, versus the consensus EPS of $0.37 and revs of $15.72 billion. CEO Michael Dell commented that their IT solutions portfolio has never been stronger. Large Enterprise revs for the company grew 12% to $4.7 billion with Servers and Networking revs increasing 16% to $2.09 billion.
Hewlett-Packard is expected to release their Q111 earnings on Tuesday, February 22, 2011, at approximately 4:00pm EST. Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.
HPQ is expected to report EPS of $1.29 on revs of $32.95 billion. Last quarter, the Palo Alto, CA-based computer giant reported EPS of $1.33 on revs of $33.3 billion, beating out consensus views calling for EPS of $1.27 with revs of $32.75 billion. Looking back one year, HPQ produced EPS of $1.10, excluding certain items, with revs of $31.2 billion, both topping estimates.
Shares gained 7.7% through the quarter to $45.69 at the end of January. The stock is up 5% since then, and finished 2010 about 19% lower.
A simple valuation puts Hewlett-Packard with a forward P/E of 8.4x FY12 EPS estimates, compared to 8.6x for Dell, Inc. (Nasdaq: DELL) and 11.2x for International Business Machines (NYSE: IBM).
Data from Bloomberg has 28 analysts with a Buy on HPQ, 8 with a hold, and two suggesting to Sell. The analyst price target average is $55.20, with a high of $70 and low of $38. Shares have traded in a range of $54.75 - $37.32 over the last 52-weeks.
Summary
Last quarter, HPQ guided to Q111 EPS of $1.29 - $1.30 with sales of $32.98 - $33 billion.
- Wells Fargo is looking for an in-line report from Hewlett-Packard, with EPS of $1.28 on revs of $32.8 billion. Enterprise spending, favorable component pricing, and a shift into higher margin products could give some upside to gross margins amid consumer PC buying weakness.
Wells comments: "We like the company’s mobile strategy, and think that if they can execute with the new TouchPad, this should help margins in the consumer PC business over time."
Wells has a Market Perform on the shares, with a valuation range of $52 - $54.
- J.P. Morgan is looking for EPS of $1.30 in the quarter. They recently made positive comments about H-P's tablet, which they believe could be a front-runner of non-Apple (Nasdaq: AAPL) tablet devices.
JPM also commented that: "Beyond tablets, we think that HP’s plans to extend its webOS platform to notebook PCs could gradually chip away at the long-held dominance by Windows." They have an Overweight rating on the shares, with a price target of $57.
- Janney Capital Markets is expecting EPS of 1.29 on revs of $32.96 billion. The firm notes that investors will be focused on comments from the new CEO, Leo Apotheker, what his views and observations so far are, but expect limited forward-looking statements from the former SAP AG (NYSE: SAP) chief. Updates on key products and customer categories will be expected. Janney is looking for positive comments on emerging markets and what sort of traction H-P is regaining in China.
Service revs should be a lower growth story, offset by companies continued adaptation to newer servers in order to keep up with growth in digital content and upgrade servers.
Janney has a Buy rating on the shares, with a $56 fair value estimate.
Last week, rival Dell reported their earnings, which was stronger than many analysts had been expecting. EPS for Dell came in at $0.53 with revs of $15.7 billion, versus the consensus EPS of $0.37 and revs of $15.72 billion. CEO Michael Dell commented that their IT solutions portfolio has never been stronger. Large Enterprise revs for the company grew 12% to $4.7 billion with Servers and Networking revs increasing 16% to $2.09 billion.
Hewlett-Packard is expected to release their Q111 earnings on Tuesday, February 22, 2011, at approximately 4:00pm EST. Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.
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