This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

HP Earnings Preview: What Wall Street's Thinking

NEW YORK (TheStreet) -- HP (HPQ - Get Report) reports fiscal second-quarter earnings after the close and investors will be looking to see whether CEO Meg Whitman can continue to cut costs and turnaround one of Silicon Valley's most prestigious companies.

Under Whitman, who took over from former CEO Leo Apotheker, the Palo Alto, Calif.-based HP has focused on cutting costs, improving the company's balance sheet and tweaking the product portfolio, as it looks to new areas of growth, including 3-D printing, cloud computing and services for growth.

For the second-quarter, analysts surveyed by Thomson Reuters expect HP to earn 88 cents a share on $27.42 billion in sales.

Though the PC industry is still contracting, according to the latest estimates, HP still derives a large portion of its revenue from its Personal Systems (PCs) and Printers segments. Both of these segments drove $14.3 billion in revenue last quarter, nearly half of the $28.1 billion in total sales.

HP is doing particularly well in Europe, the Middle East and Africa, according to research firm Gartner, as HP owned 16% of the PC market, selling 12.2 million units, up from 15.1% or 11.78 million in the year ago quarter.

On HP's fiscal first-quarter earnings call, Whitman noted that HP is still turning around the company in its five-year strategic roadmap to fix the company and reignite it for growth, while rebuilding and repairing the balance sheet. "Our focus on rebuilding our balance sheet has resulted in an improvement of our operating company net cash position by more than $6 billion in the first quarter of 2013," Whitman said on the call. "We have strengthened our relationship with customers and channel partners, something I see every day in my interactions with them, and our global workforce is fully aligned behind the common vision of the company, delivering solutions for the new style of IT. And we are seeing acceleration in the industry's movement towards that new style of IT."

Must Read: Spotify Cracks Nut on Subscribers, Breaks 10 Million Mark

Shares of HP were lower in Wednesday trading, off 0.58% to $32.61 ahead of the results.

Going into the earnings release, analysts were largely positive, noting that there could be some upside surprise in the results, as HP continues to work on improving its cost structure. Here's what a few of them had to say.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HPQ $12.71 1.40%
AAPL $117.29 -0.85%
FB $107.04 2.70%
GOOG $766.64 3.20%
TSLA $237.30 3.10%


Chart of I:DJI
DOW 17,888.35 +168.43 0.95%
S&P 500 2,102.63 +22.22 1.07%
NASDAQ 5,156.3060 +47.64 0.93%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs