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HP Inc Reports Q4 Earnings: What to Watch

 

HP Inc. $HPQ is set to report Q4 earnings on November 29th after market close.

 

Company’s Background

HP Inc is an American multinational information technology company, which develops personal computers (PCs), printers and related supplies, as well as 3D printing solutions. It provides products, technologies, software, solutions, and services to individual consumers, small- and medium-sized businesses, and large enterprises, including customers in the government, health, and education sectors worldwide. HP’s main competitors are Apple, Lenovo, Asus, Dell, and Microsoft.

 

Factors:

The company’s results might be influenced by the double-digit growth in the Personal Systems and Printer divisions. The strong demand for desktop shipment and the rising popularity of gaming devices is also an important factor, which will influence on the result. The company is likely to sell more hardware units than the previous year quarter helped by the growth in the Commercial and Consumer hardware sales.

 

HP has been experiencing strong demand of its desktop among corporate buyers that is likely to benefit its results for the fourth quarter.

 

Also, the 3D printing market remained a major traction for the company aided by its innovative and expanding portfolio as advanced 3D printing technology, HP Metal Jet, was launched during the quarter. The margins are anticipated to be impacted by the rising PC component and logistics costs and rising printing material costs.


Shares of HP opened higher on Wednesday and is trading in the green territory in the mid-afternoon. The stock has risen over 10% in the year so far and over 9% in the past year.

 

Previous Earnings

In comparison, for the third quarter, HP has posted a 26% jump in earnings. Personal Systems divisions sales improved 12% while it performed well in that quarter, with earnings up 21% year-over-year at $0.52. The company surprised analysts who were expecting $0.51 per share. Overall, its quarterly revenues jumped to $14.59 billion, while it had reported $13.06 billion in the same period a year ago. the printing segment sales climbed 11%. During the previous year fourth-quarter, the company reported a profit of $0.44 per share on revenue of $13.93 billion.

 

Analysts’ Opinion

Majority of the analysts recommended a “strong buy” or “buy” rating on the stock with an average price target of $27.38. Zacks Investment Research cut $HPQ from a “buy” rating to a “hold” rating, ValuEngine – from a “buy” rating to a “hold” rating. Citigroup upped their price objective on shares of HP to $30.00 and gave the stock a “buy” rating. Maxim Group upped their price target on shares of HP from $28.00 to $29.00 and gave the company a “buy” rating. Finally, Morgan Stanley upped their price target on shares of HP from $28.00 to $29.00 and gave the company an “equal weight” rating in a report. Eleven equities research analysts have rated the stock with a “hold” rating and eight have given a “buy” rating to the company’s stock. HP has an average rating of “Hold” and an average target price of $27.44, which is 17% greater than the current price.

 

Wall Street’s Estimates:

EPS (Average Estimate): $0.54/share
Q4 Revenue (Average Estimate): $15.1B

 

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