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What's in the Cards for Hewlett Packard's (HPE) Q2 Earnings?
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Hewlett Packard Enterprise (HPE - Free Report) is scheduled to report second-quarter fiscal 2022 results on Jun 1.
For the quarter, Hewlett Packard projects non-GAAP earnings between 41 cents and 49 cents per share. The Zacks Consensus Estimate for earnings is pegged at 45 cents, indicating a year-over-year decline of 2.2%.
The consensus mark for quarterly revenues stands at $6.83 billion, suggesting an increase of 1.9% from the year-ago period.
Hewlett Packard’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 10.7%.
Hewlett Packard Enterprise Company Price and EPS Surprise
In the first quarter, HPE delivered non-GAAP earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 15.2% and were a penny higher than the prior-year quarter’s earnings of 52 cents.
Net revenues of $7 billion were up 2% on a year-over-year basis but missed the consensus mark of $7.02 billion.
Factors to Note
Hewlett Packard’s fiscal second-quarter performance is likely to have gained from increased investments in data center infrastructure, modernization of business applications and IT operations.
Accelerated digital transformation and higher demand for cloud networking due to the pandemic-induced remote working wave are likely to have contributed to the second-quarter top line. Solid adoption of Aruba ESP (Edge Services Platform), which provides the edge-to-cloud connectivity as a service, and its cloud services arm, HPE GreenLake, might have driven the to-be-reported quarter’s revenues.
The company is likely to have benefited from strong momentum in the as-a-service platform and significant contributions from growth businesses, such as high-performance computing & modular cooling systems and Intelligent Edge. In the last quarter, Intelligent Edge segment orders grew 35% year over year, which was reflected in the top-line growth of 11% from this segment.
Higher demand for HPE’s edge-to-cloud and software-as-a-service data storage solutions in the pandemic-induced remote-working environment is anticipated to have acted as a key growth driver.
Hewlett Packard’s gross margin is likely to have improved during the quarter, driven by a strong pricing discipline that would manage rising supply & logistic costs, the benefits from a positive mix shift toward high-margin, software-rich businesses, cost takeouts and automation. However, continued supply-chain constraints are likely to have hurt Hewlett Packard’s sales growth in the quarter under review.
HPE expects to continue facing component shortages, higher commodity costs and increased shipping fees for the next few quarters. These factors are likely to have negatively impacted its sales growth and profitability in the quarter under review.
Besides, foreign-exchange headwinds are expected to have been concerns along with several organizations shifting to cloud computing due to their maintenance-free and cost-effective structure compared with standalone servers.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for HPE this time. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Hewlett Packard currently holds a Zacks Rank of 4 (Sell) and has an Earnings ESP of -1.60%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Per our model, AutoNation (AN - Free Report) , Commercial Metals (CMC - Free Report) and The Kroger Co. (KR - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
AutoNation is slated to report second-quarter 2022 results on Jul 18. The stock has a Zacks Rank #1 and an Earnings ESP of +2.15%. Its earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 27.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AN’s quarterly earnings is pegged at $5.95 per share, suggesting a year-over-year improvement of 23.19%. Its quarterly revenues are estimated to decrease 1.59% year over year to $6.87 million.
Commercial Metals has a Zacks Rank #2 and an Earnings ESP of +8.63%. The company is scheduled to report third-quarter fiscal 2022 results on Jun 16. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 16%.
The Zacks Consensus Estimate for CMC’s third-quarter bottom line is pegged at $1.97 per share, suggesting year-over-year growth of 89.4%. The consensus mark for revenues stands at $2.34 billion, indicating a rise of 26.9% from the year-ago quarter.
Kroger has a Zacks Rank #2 and an Earnings ESP of +2.95%. The company is scheduled to report first-quarter fiscal 2023 results on Jun 16. It has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 22.1%.
The Zacks Consensus Estimate for KR’s first-quarter earnings is pegged at $1.27 per share, suggesting a year-over-year increase of 6.72%. The consensus mark for revenues stands at $43.22 billion, indicating an increase of 4.65% year over year.
Image: Bigstock
What's in the Cards for Hewlett Packard's (HPE) Q2 Earnings?
Hewlett Packard Enterprise (HPE - Free Report) is scheduled to report second-quarter fiscal 2022 results on Jun 1.
For the quarter, Hewlett Packard projects non-GAAP earnings between 41 cents and 49 cents per share. The Zacks Consensus Estimate for earnings is pegged at 45 cents, indicating a year-over-year decline of 2.2%.
The consensus mark for quarterly revenues stands at $6.83 billion, suggesting an increase of 1.9% from the year-ago period.
Hewlett Packard’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 10.7%.
Hewlett Packard Enterprise Company Price and EPS Surprise
Hewlett Packard Enterprise Company price-eps-surprise | Hewlett Packard Enterprise Company Quote
In the first quarter, HPE delivered non-GAAP earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 15.2% and were a penny higher than the prior-year quarter’s earnings of 52 cents.
Net revenues of $7 billion were up 2% on a year-over-year basis but missed the consensus mark of $7.02 billion.
Factors to Note
Hewlett Packard’s fiscal second-quarter performance is likely to have gained from increased investments in data center infrastructure, modernization of business applications and IT operations.
Accelerated digital transformation and higher demand for cloud networking due to the pandemic-induced remote working wave are likely to have contributed to the second-quarter top line. Solid adoption of Aruba ESP (Edge Services Platform), which provides the edge-to-cloud connectivity as a service, and its cloud services arm, HPE GreenLake, might have driven the to-be-reported quarter’s revenues.
The company is likely to have benefited from strong momentum in the as-a-service platform and significant contributions from growth businesses, such as high-performance computing & modular cooling systems and Intelligent Edge. In the last quarter, Intelligent Edge segment orders grew 35% year over year, which was reflected in the top-line growth of 11% from this segment.
Higher demand for HPE’s edge-to-cloud and software-as-a-service data storage solutions in the pandemic-induced remote-working environment is anticipated to have acted as a key growth driver.
Hewlett Packard’s gross margin is likely to have improved during the quarter, driven by a strong pricing discipline that would manage rising supply & logistic costs, the benefits from a positive mix shift toward high-margin, software-rich businesses, cost takeouts and automation. However, continued supply-chain constraints are likely to have hurt Hewlett Packard’s sales growth in the quarter under review.
HPE expects to continue facing component shortages, higher commodity costs and increased shipping fees for the next few quarters. These factors are likely to have negatively impacted its sales growth and profitability in the quarter under review.
Besides, foreign-exchange headwinds are expected to have been concerns along with several organizations shifting to cloud computing due to their maintenance-free and cost-effective structure compared with standalone servers.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for HPE this time. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Hewlett Packard currently holds a Zacks Rank of 4 (Sell) and has an Earnings ESP of -1.60%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Per our model, AutoNation (AN - Free Report) , Commercial Metals (CMC - Free Report) and The Kroger Co. (KR - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
AutoNation is slated to report second-quarter 2022 results on Jul 18. The stock has a Zacks Rank #1 and an Earnings ESP of +2.15%. Its earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 27.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AN’s quarterly earnings is pegged at $5.95 per share, suggesting a year-over-year improvement of 23.19%. Its quarterly revenues are estimated to decrease 1.59% year over year to $6.87 million.
Commercial Metals has a Zacks Rank #2 and an Earnings ESP of +8.63%. The company is scheduled to report third-quarter fiscal 2022 results on Jun 16. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 16%.
The Zacks Consensus Estimate for CMC’s third-quarter bottom line is pegged at $1.97 per share, suggesting year-over-year growth of 89.4%. The consensus mark for revenues stands at $2.34 billion, indicating a rise of 26.9% from the year-ago quarter.
Kroger has a Zacks Rank #2 and an Earnings ESP of +2.95%. The company is scheduled to report first-quarter fiscal 2023 results on Jun 16. It has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 22.1%.
The Zacks Consensus Estimate for KR’s first-quarter earnings is pegged at $1.27 per share, suggesting a year-over-year increase of 6.72%. The consensus mark for revenues stands at $43.22 billion, indicating an increase of 4.65% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.