HP Inc. (HPQ) is scheduled to report results of its fiscal third quarter after the market close on August 27, with a conference call scheduled for 4:30 pm ET. What to watch for:
1. Q3 EPS CONSENSUS LOWER: Along with its last report, HP Inc. guided for Q3 earnings per share of 39c-45c. At the time, analysts were expecting the company to report Q3 EPS of 49c, but that consensus estimate has since slipped to 43c. The company noted at the time that Q3 EPS estimates exclude 4c per diluted share, primarily related to restructuring and other charges, acquisition-related charges, defined benefit plan settlement charges, amortization of intangible assets, non-operating retirement-related credits/charges, tax adjustments and the related tax impact on these items.
2. BARRON'S ON TECH: Eric Savitz of Barron's wrote earlier this month that Cisco (CSCO) has been Silicon Valley's early-warning signal, and that following the company's latest quarterly report, investors also sold off Hewlett Packard Enterprise (HPE), Dell Technologies (DELL), NetApp (NTAP), Pure Storage (PSTG), IBM (IBM), and HP Inc. Savitz said that in the era of accelerating "digital transformation," the legacy tech players are falling behind, and investors are losing interest. The author noted that the market seems convinced that cloud-based software providers-companies like DocuSign (DOCU), Okta (OKTA), Slack Technologies (WORK), CrowdStrike Holdings (CRWD), and Salesforce (CRM), are insulated from COVID-19 pain.
3. COWEN INITIATION: In late June, Cowen analyst Krish Sankar initiated coverage of HP Inc. with a Market Perform rating and $18 price target. The analyst said its ongoing restructuring activities are supportive for earnings, though a macro slowdown casts some uncertainties on the new Value Creation plan's earnings goals, capital returns, and efficacy of the new printing and supplies pricing strategy.
4. IDC PC SHIPMENTS: Q2 of 2020 ended well for the traditional PC market, comprised of desktops, notebooks, and workstations, with global shipments growing 11.2% year over year reaching a total of 72.3 million units, according to preliminary results from the International Data Corporation Worldwide Quarterly Personal Computing Device Tracker released in early July. As restrictions around the world tightened in the first few weeks of the quarter, demand for notebooks continued to grow to maintain continuity of business and schooling for many communities, IDC said. Despite logistics issues early in the quarter, the cost and frequency of both air and sea freight inched closer to normal. This, combined with PC production ramping up, and in some cases surpassing previous levels, meant that retailers and other distributors around the world had ample supply and were ready to fulfill the surge in demand.
HP Inc.
+0.09 (+0.49%)
Cisco
-0.02 (-0.05%)
HP Enterprise
-0.155 (-1.60%)
Dell Technologies
+0.06 (+0.10%)
NetApp
+1.7 (+4.02%)
Pure Storage
-0.125 (-0.83%)
IBM
+0.04 (+0.03%)
DocuSign
+1.61 (+0.75%)
Okta
+0.73 (+0.33%)
Bought by CRM
+0.72 (+2.38%)
Crowdstrike
+0.58 (+0.50%)
Salesforce
-4.36 (-1.60%)