HPQ HP Inc

By Jay Greene 

HP Inc., the printer and personal-computer maker born from the 2015 split of Hewlett-Packard, is scheduled to report fiscal first-quarter results Thursday after the market closes. Here is what you need to know:

EARNINGS FORECAST: HP is expected to report adjusted earnings of 42 cents a share, according to an S&P Global Market Intelligence survey of analysts. That would be up from adjusted earnings of 38 cents a share a year earlier. Adjusted earnings exclude restructuring and acquisition-related charges, among other items.

REVENUE FORECAST: Analysts expect HP to post revenue of $13.47 billion, up 6% from a year ago.

WHAT TO WATCH:

PC GAINS: As the overall PC market contracts, HP has managed to pick up market share. World-wide PC shipments declined 2% in the final three months of 2017, according to market research firm Gartner Inc. But HP managed solid growth, shipping 16.1 million PCs in the quarter, up 6.6% from the year-earlier period. Those sales pushed it ahead of Lenovo Group Ltd. as the world's top PC maker, with a nearly 23% share. In a recent research report, Mizuho Securities analyst Abhey Lamba said he sees "near-term strength of consumer PCs" and the "potential improvement in corporate demand." He expects HP to report a 3% gain in revenue for its Personal Systems Group, which includes HP's PC business, to $8.4 billion.

PRINTER PROGRESS: HP closed its $1.05 billion acquisition of Samsung Electronics Co.'s printer business in November, more than a year after agreeing to buy it. HP has been particularly bullish on the so-called A3 copier segment, a business that handles larger paper used for posters and photographic prints. J.P. Morgan analyst Paul Coster wrote in a recent report that he anticipates "a large uptick in consumer hardware driven by the acquired Samsung business." He expects a 7% jump in total printing-segment revenue to $4.8 billion.

TAXING TIMES: HP's cash holdings -- just shy of $7 billion at the end of the fiscal fourth quarter -- are small compared with the $285 billion in cash held by Apple Inc. and $142 billion held by Microsoft Corp. at the end of their quarters. Those giants held the vast majority of their cash overseas and are now able to repatriate huge sums at reduced rates thanks to the new U.S. tax law. Even though HP won't bring home similar eye-popping sums, the law could provide "upside" for the company throughout the fiscal year by way of a "lower tax rate and increased repurchase activity given access to offshore cash," RBC Capital Markets analyst Amit Daryanani wrote in a recent report.

Write to Jay Greene at Jay.Greene@wsj.com

(END) Dow Jones Newswires

February 22, 2018 05:44 ET (10:44 GMT)

HP (NYSE:HPQ)
Historical Stock Chart
From Aug 2024 to Sep 2024

HP (NYSE:HPQ)
Historical Stock Chart
From Sep 2023 to Sep 2024