Hewlett-Packard Company (NYSE: HPQ): Q1 Earnings Preview

Hewlett-Packard Company (NYSE: HPQ), the world's largest PC maker, is scheduled to release its fiscal first-quarter financial results after the closing bell on Tuesday, February 22, 2011. Analysts, on average, expect the company to report earnings of $1.29 per share on revenue of $32.96 billion. In the year ago quarter, the company reported earnings of $1.07 per share on revenue of $31.18 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 fourth quarter, the Palo Alto, California-based company's net income was $2.5 billion, or $1.10, compared with a profit of $2.4 billion, or 99 cents a share, in the year-ago quarter. On an adjusted basis, the company earned $1.33 per share in the latest quarter. Revenue increased to $33.3 billion from $30.8 billion. Analysts, on average, expected the company to report earnings of $1.27 per share on revenue of $32.75 billion.

At its last earnings call in November, the company said that it expects fiscal first quarter revenue of approximately $32.8 billion to $33.0 billion, GAAP EPS in the range of $1.06 to $1.08, and non-GAAP EPS in the range of $1.28 to $1.30. First quarter fiscal 2011 GAAP and non-GAAP EPS estimates include a one-time gain of approximately $0.04 per share primarily related to the disposition of real estate. First quarter fiscal 2011 non-GAAP EPS estimates exclude after-tax costs of approximately $0.22 per share, related primarily to the amortization of purchased intangibles, restructuring charges and acquisition-related charges.

The company also raised its full-year 2011 outlook. HP said that it now expects full year fiscal 2011 revenue in the range $132 billion to $133.5 billion, GAAP EPS in the range of $4.42 to $4.52, and non-GAAP EPS in the range of $5.16 to $5.26. GAAP and non-GAAP EPS includes a one-time gain of approximately $0.04 per share primarily related to the disposition of real estate. Full year fiscal 2011 non-GAAP EPS estimates exclude after-tax costs of approximately $0.74 per share, related primarily to the amortization of purchased intangibles, restructuring charges and acquisition-related charges. Previously, the company anticipated fiscal year 2011 revenue in the range of $131.5 billion to $133.5 billion, GAAP EPS of $4.35 to $4.45 and non-GAAP EPS of $5.05 to $5.15 per share.

The company has a strong business model, and still rules the computing world, with a leadership position in both PC and Server segments. Hewlett-Packard is also well positioned to challenge networking leader Cisco Systems Inc. (NASDAQ: CSCO), and gain share in the networking market.

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 totaled 93.5 million units in the fourth quarter of 2010, a 3.1 percent increase from the fourth quarter of 2009.

HP still has several solid product platforms. Recently, Hewlett-Packard Co. lifted the wraps on a new tablet and smartphones based on the webOS operating system, which the company inherited with last year’s acquisition of Palm Inc. for $1.2 billion. At an event in San Francisco, H-P announced the TouchPad tablet, as well as the Pre3 and Veer smartphones. The TouchPad is expected to ship sometime this summer.

Forecasts for tablets are big. According to iSuppli, global shipments of such devices are expected to reach more than 240 million in 2015 — up 12-fold from today’s numbers. Another market-research firm, DisplaySearch, predicts tablet shipments will hit 55.7 million units this year, likely eating into sales of PC products such as laptops. However, a potential problem for H-P is that tablets are also seen cannibalizing segments of the PC market — particularly low-end notebooks. Given the lead of other players, some analysts also expect a rough road ahead for Hewlett-Packard in the tablet sector. According to Gartner, tablet devices are expected to displace around 10% of personal-computer shipments by 2014, emerging as a leading disruptive factor for PC growth.

Of late, H-P has relied on acquisitions to strengthen its business and broaden its product offerings. The company recently agreed to acquire Vertica, a privately held, real-time analytics platform company based in Billerica, Massachusetts. The company said that the acquisition of Vertica would enhance HP capabilities for information optimization, adding sophisticated, real-time business analytics for large and complex sets of data in physical, virtual and cloud environments.

Full Disclosure: None.

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.

Hewlett-Packard (NYSE: HPQ): Q2 Earnings Preview

Hewlett-Packard (NYSE: HPQ) is scheduled to release fiscal second-quarter earnings after the market close on Wednesday, May 19, 2010. Analysts, on average, expect the company to report earnings of $1.05 per share on revenue of $29.82 billion. In the year-ago period, the company reported earnings of 86 cents per share on revenue of $27.35 billion.

Hewlett-Packard Company offers various products, technologies, software, solutions, and services worldwide. The company's Services segment provides consulting, outsourcing, and technology services to infrastructure, applications, and business process domains.

In the preceding fiscal-first quarter,  the Palo Alto, California-based company reported that its net income was $2.3 billion or $0.96 per share, compared to $1.9 billion or $0.75 per share for the year-ago quarter. Excluding items, non-GAAP net income for the first quarter was $2.7 billion or $1.10 per share, compared to $2.3 billion or $0.93 per share in the prior year quarter. Revenue grew 8% to $31.18 billion from $28.81 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $1.06 per share on revenue of $30.01 billion. 

For the second quarter, HP expects revenue of $29.4 billion to $29.7 billion, GAAP earnings of $0.89 to $0.91 per share and non-GAAP earnings of $1.03 to $1.05 per share. 

For the fiscal year 2010, the company anticipates revenue of $121.5 billion to $122.5 billion, GAAP earnings of $3.79 to $3.86 per share and non-GAAP earnings of $4.37 to $4.44 per share. Analysts currently expect the company to earn $4.37 per share on revenue of $120.03 billion for the fiscal year 2010.

Hewlett Packard has benefited from improving trends in PCs, servers, and printing. PC sales particularly got a boost from stronger consumer demand, especially during the holiday season and following the rollout of Windows 7, Microsoft Corp.'s new operating system. Worldwide PC shipments during the first three months rose 27.4% from a year ago to 84.3 million units, according to preliminary results by market research firm Gartner, Inc. Gartner had been expecting first quarter PC shipments to grow 22%. Hewlett-Packard Co. continued to be the world's top PC vendor, with 15.3 million unit shipments, up 19.9% from a year earlier, Gartner said.

Late in April, Hewlett-Packard agreed to buy smart phone maker Palm for about $1.2 billion in cash. The transaction is expected to close during HP's third fiscal quarter ending July 31, 2010. The proposed merger would transform H-P, already the world's top seller of personal computers, into a leading competitor in the rapidly growing smartphone market -- an area pioneered by Palm. Commenting on the deal, Todd Bradley, executive vice president, Personal Systems Group, HP said, "Palm's innovative operating system provides an ideal platform to expand HP's mobility strategy and create a unique HP experience spanning multiple mobile connected devices."

Hewlett-Packard presented a Windows-powered tablet called Slate at CES in January. Many analysts now believe HP will now design a tablet using Palm's software. H-P is also understood to be in discussions with Google about incorporating Google's Android operating system into a slate or tablet-style computer later this year. Although tablets are projected to make up only 1 percent of computer sales this year, that could rise to nearly 25 percent by 2015, according to Coda Research Consultancy.

In terms of stock performance, H-P shares have rallied nearly 36% over the past year.

Disclosure: Author doesn’t own any of the stocks discussed here. 

Hewlett-Packard Co. (NYSE: HPQ): Q1 Earnings Preview 2010

Hewlett-Packard Co. (NYSE: HPQ), the world's largest PC maker, is scheduled to release its fiscal first-quarter 2010 financial results after the closing bell on Wednesday, February 17, 2010. Analysts, on average, expect the company to report earnings of $1.06 a share on revenue of $30.01 billion. In the year ago period, the company posted earnings of 93 cents per share on revenue of $28.80 billion. In the last four quarters, the company has beaten Wall Street expectations

Hewlett-Packard Company offers various products, technologies, software, solutions, and services worldwide. The company's Services segment provides consulting, outsourcing, and technology services to infrastructure, applications, and business process domains.

In the preceding fiscal fourth quarter, the Palo Alto, California-based company reported that its fourth quarter profit rose 14% from last year, as cost cuts helped improve margins and offset an 8% decline in revenue. Net income totaled $2.4 billion or $0.99 per share, compared to $2.1 billion or $0.84 per share, in the comparable quarter last year. Excluding items, non-GAAP net income for the fourth quarter was $2.8 billion or $1.14 per share, compared to $2.6 billion or $1.03 per share in the prior year quarter. Quarterly revenue fell 8% to $30.78 billion from $33.60 billion in the same quarter last year. Analysts, on average, expected the company to earn $1.13 per share on revenue of $30.36 billion for the fourth quarter. GAAP operating margin for the fourth quarter improved to 10.2% from 8.2% a year ago.

In November, HP reaffirmed its first quarter guidance which calls for revenue of $29.6 billion to $29.9 billion, GAAP earnings of $0.90 to $0.92 per share and non-GAAP earnings of $1.03 to $1.05 per share. For the fiscal year 2010, the company expects revenue of $118.0 billion to $119.0 billion, GAAP earnings of $3.65 to $3.75 per share and non-GAAP earnings of $4.25 to $4.35 per share.

Hewlett Packard is poised to benefit from improving trends in PCs, servers, and printing. PC sales particularly got a boost from stronger consumer demand, especially during the holiday season and following the rollout of Windows 7, Microsoft Corp.'s new operating system. According to technology research firm Gartner, worldwide PC shipments surpassed 90 million units in the fourth quarter of 2009, a 22.1% increase from last year. It was the strongest quarter over quarter growth rate the worldwide PC market has experienced in the last seven years. According to the report, the total worldwide PC vendor unit shipments for the fourth quarter increased by 22.1% to 90.03 million units from 73.72 million units a year-ago. HP's worldwide PC shipments for the fourth quarter grew by 24.9% to 17.79 million units from 14.23 million units a year-ago.

Among other developments during the quarter, Hewlett-Packard Co. and Microsoft Corp. announced Wednesday a $250 million partnership designed to simplify technology operations for businesses and promote cloud-computing technologies.

The company's stock currently trades at a forward P/E (fye 31-Oct-11) of 10.12 and PEG Ratio (5 yr expected) of 1.13. In terms of stock performance, HP shares have gained 38 percent over the past year.

Full Disclosure: None.