Earnings Preview : Hewlett Packard (HPQ)
Monday, February 15, 2022 1:20 PM

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(By Tim) HP [NYSE: HPQ] will report earnings for the first quarter of 2010 on February 17 and hold a conference call to discuss the earnings at 4:30 EST. The company's fiscal quarter ended on January 31, 2010.

The consensus earnings estimate for the quarter is $1.06 per share on a fraction over $30 billion in revenues. A large number of analysts (29) put out estimates on HP and the range is a tight
$1.04 to $1.10. The $1.06 in earnings would be a 14% improvement on the 93ยข earned in the first quarter of 2009. The revenue estimate is 4.2% higher that the company's revenue a year earlier.

Over the last four quarters, HP has hit the earnings estimate spot on or a penny high. An earnings surprise here really would be a surprise. The current quarter earning estimate has been creeping upward with almost half the analysts increasing their prediction over the last 30 days.

Hewlett Packard was formed in 1939 when William Hewlett and David Packard started an electronic equipment business in a garage in Palo Alto. In the 1970's the company moved from electronic equipment into business equipment manufacturing. In the 1980's and 1990's Hewlett Packard was a major player in all aspect of computer equipment including workstations, minicomputers and personal computers. HP also became well known to the public for its inkjet and laser printers. In 2002 Hewlett Packard merged with Compaq in a deal valued at $19 billion for Compaq and the merged company started trading under the HPQ stock symbol. HP acquired EDS in 2008 for $13.9 billion to expand the company's offerings in the computer service sector.
HPQ is a component stock of the Dow Jones Industrial Average, the S&P 100 and the S&P 500.

HP's business is divided into the Personal Systems Group, which provides about 30% of revenues and makes HP the largest PC manufacturer in the world. Services are just behind the PSG in revenue and are currently the growth engine of the company. Imaging and Printing has contributed about 20% of revenues, but printer shipments were down 20% in the 4th quarter of 2009. Enterprise Storage and Servers was good for 14% of revenue but this segment is also dropping.

HP is in serious competition with Dell for the business and personal PC market. The release of Windows 7 by Microsoft should result in a boost for PC sales in this quarter. The Windows 7 effect is probably the main factor that could result in an earnings surprise. Right now, the HP business plan seems to be working to give the company 10% to 13% per year earnings growth for the foreseeable future.



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