HP Q3 Preview: CEO Replacement Overshadows The Quarter
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Price: $24.68 -0.04%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 4.8%
Revenue Growth %: +2.4%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 4.8%
Revenue Growth %: +2.4%
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Hewlett-Packard (NYSE: HPQ) is trading lower ahead of the company's third quarter earnings release, expected after the market closes today, August 19, 2010. Shares are down 2.27% to $40.42 in afternoon trading.
The company is expected to report an EPS of $1.08 on revs of $30.46 billion. HPQ posted an EPS of $1.09 on revs of $30.8 billion, compared to the consensus revs of $29.82 billion and an EPS of $1.04. For the Q309, the company had an EPS of $0.91 and revs of $27.45 billion, both beating the consensus.
Shares of the company lost a little through the quarter, dropping 12.5% to $46.04 at the end of July. The stock is currently trading 21% lower since the start of 2010.
The company is trading for a forward P/E of 9.2x forward FY10 EPS estimates, and 8.3x FY11 EPS estimates. By comparison, Dell (Nasdaq: DELL) is at 8.4x FY11 EPS and IBM (NYSE: IBM) is going for 10.4x.
Data from Bloomberg shows that 28 analysts have a Buy rating on the shares, 9 have a Hold, and nil suggest to Sell the stock. The analyst price target consensus is $58.04, with a high of $65, and a low of $45.
Summary
In early August, the company issued preliminary Q3 revenue guidance to the tune of $30.7 billion with an adjusted EPS of $1.08. CEO Mark Hurd was found to violate HP's standards of business conduct, rather than their sexual harassment policy, and subsequently left the company.
HPQ also already raised their FY10 EPS estimates from $4.45 - $4.50 to $4.49 - $4.51, compared to the consensus (at the time) of $4.49. Sales are also expected to be $125.3 - $125.5 billion, compared to the consensus views of $124.94 billion.
Since earnings were announced early, and should be pretty solidified, analysts and investors will be looking for any indications of a replacement for the CEO position.
Or so says Kaufman Bros., who currently has a Buy rating and a price target lowered from $61 to $51 on the shares. They note that Mark Hurd will be a tough executive to replace. Also, the tone of the call, like that for Cisco (Nasdaq: CSCO) may determine near-term stock direction.
Hewlett-Packard Co. is expected to release their Q310 earnings on Thursday, August 19, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
The company is expected to report an EPS of $1.08 on revs of $30.46 billion. HPQ posted an EPS of $1.09 on revs of $30.8 billion, compared to the consensus revs of $29.82 billion and an EPS of $1.04. For the Q309, the company had an EPS of $0.91 and revs of $27.45 billion, both beating the consensus.
Shares of the company lost a little through the quarter, dropping 12.5% to $46.04 at the end of July. The stock is currently trading 21% lower since the start of 2010.
The company is trading for a forward P/E of 9.2x forward FY10 EPS estimates, and 8.3x FY11 EPS estimates. By comparison, Dell (Nasdaq: DELL) is at 8.4x FY11 EPS and IBM (NYSE: IBM) is going for 10.4x.
Data from Bloomberg shows that 28 analysts have a Buy rating on the shares, 9 have a Hold, and nil suggest to Sell the stock. The analyst price target consensus is $58.04, with a high of $65, and a low of $45.
Summary
In early August, the company issued preliminary Q3 revenue guidance to the tune of $30.7 billion with an adjusted EPS of $1.08. CEO Mark Hurd was found to violate HP's standards of business conduct, rather than their sexual harassment policy, and subsequently left the company.
HPQ also already raised their FY10 EPS estimates from $4.45 - $4.50 to $4.49 - $4.51, compared to the consensus (at the time) of $4.49. Sales are also expected to be $125.3 - $125.5 billion, compared to the consensus views of $124.94 billion.
Since earnings were announced early, and should be pretty solidified, analysts and investors will be looking for any indications of a replacement for the CEO position.
Or so says Kaufman Bros., who currently has a Buy rating and a price target lowered from $61 to $51 on the shares. They note that Mark Hurd will be a tough executive to replace. Also, the tone of the call, like that for Cisco (Nasdaq: CSCO) may determine near-term stock direction.
Hewlett-Packard Co. is expected to release their Q310 earnings on Thursday, August 19, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
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