HP reports earnings on Wednesday and an analyst for Sterne Agee says the news won’t be ALL bad, just MOSTLY bad.First the good news. HP will meet or beat its guidance on earnings per share and hit 91 cents, predicts Sterne Agee analyst Shaw Wu in a research note. HP offered guidance of 88 cents to 91 cents (the consensus is 91 cents). HP has promised $4 EPS for the full year and Wu thinks we’ll hear HP repeat that promise.
Now all the bad news: HP will come in a little short on revenue, Wu believes. HP hasn’t given revenue guidance but analysts are expecting $29.92 billion. Wu predicts $29.4 billion.
That’s not much of a shortfall, but still it’s not good. The Street isn’t expecting that much from HP to begin with. Analysts expect HP will SHRINK revenue by 26%. So watch investors get ticked off if the company can’t even manage to meet that.
Worse still, HP may need to lower EPS guidance for its next quarter from $1.02 to $1. We all know what happened to Cisco when it lowered guidance blaming sluggish enterprise sales and the economic worries from Europe. It’s stock got murdered.
Wu will be looking for word that HP’s PC business is picking up but that will be offset by the performance of just about all its other business units.
As for layoffs, word is that HP will be spelling out its plans for that on Wednesday, but Wu thinks these layoffs won’t help the stock price until FY13, not this year.
Business Insider Emails & Alerts
Site highlights each day to your inbox.