Monday, November 22, 2010

Hewlett-Packard Co. (NYSE: HPQ): Q4 Earnings Preview

Hewlett-Packard Company (NYSE: HPQ), the world's largest PC maker, is scheduled to release its fiscal fourth-quarter financial results after the closing bell on Monday, November 22, 2010. Analysts, on average, expect the company to report earnings of $1.27 per share on revenue of $32.75 billion. In the year ago quarter, the company reported earnings of $1.14 per share on revenue of $30.78 billion.

Hewlett-Packard Company offers various products, technologies, software, solutions, and services worldwide. Hewlett-Packard Company (HP) is a global provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses (SMBs) and large enterprises, including customers in the government, health and education sectors.

In the preceding fiscal third quarter, the Palo Alto, California-based company's net income was $1.8 billion, or 75 cents a share, compared to $1.7 billion, or 69 cents a share, in the year-ago quarter. On an adjusted basis, the company earned $1.08 a share in the latest quarter. Revenue increased $30.7 billion from $27.6 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $1.08 a share on revenue of $30.36 billion. 

At its last earnings call in August, the company said that it expects revenue of $32.5 billion to $32.7 billion, GAAP earnings of $1.03 to $1.05 per share and non-GAAP earnings of $1.25 to $1.27 per share. Analysts currently expect the company to earn $1.26 per share on revenue of $32.65 billion for the fourth quarter. For the fiscal year 2010, the company expects revenue of $125.3 billion to $125.5 billion, GAAP earnings of $3.62 to $3.64 and non-GAAP earnings of $4.49 to $4.51 per share. 

The company has benefited from improving trends in printing and buoyant spending from companies that are updating aging personal computers and servers. According to technology research firm Gartner, worldwide PC shipments increased 7.6% year-over-year in the third quarter of 2010.

Late in September, the company forecast fiscal year 2011 revenue and earnings that came in above analysts' current consensus estimates.The world's biggest technology company said it expects fiscal year 2011 revenue to be in the range of $131.5 billion to $133.5 billion. HP also said that it expects GAAP earnings of $4.35 to $4.45 per share and non-GAAP earnings of $5.05 to $5.15 per share for the fiscal year 2011.The non-GAAP earnings guidance excludes after-tax costs of about $0.70 per share, related mainly to the amortization of purchased intangible assets, restructuring charges and acquisition-related charges.

Of late, HP has relied on acquisitions to strengthen its business and expand its product offerings. In September, HP agreed to buy data storage firm 3PAR Inc. for $33 per share in cash, or $2.35 billion, winning a bidding war against rival Dell Inc. The company also acquired security software maker ArcSight, Inc. for $43.50 per share, or an enterprise value of $1.5 billion. 

Among other developments, the company recently named Leo Apotheker as Chief Executive Officer and President. Apotheker previously served as CEO of SAP.

In terms of stock performance, HP shares are down nearly 20% since the beginning of the year. 

Full Disclosure: None.
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