H-P Earnings on the Horizon

S&P 500 (NYSE:SPY) component Hewlett-Packard (NYSE:HPQ) will unveil its latest earnings Wednesday, August 22, 2012 after the bell. Hewlett-Packard provides products, technologies, software and services to individual consumers, businesses and large enterprises, including customers in the government.

Hewlett-Packard Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 99 cents per share, a decline of 10% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.02. Between one and three months ago, the average estimate moved down. It has risen from 97 cents during the last month. Analysts are projecting profit to rise by 16.8% compared to last year’s $4.06.

Past Earnings Performance: The company’s quarterly results have come in above estimates for the last three quarters. Last quarter, the company booked net income of 98 cents per share versus a mean estimate of profit of 91 cents per share.

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A Look Back: In the second quarter, profit fell 30.9% to $1.59 billion (80 cents a share) from $2.3 billion ($1.05 a share) the year earlier, but exceeded analyst expectations. Revenue fell 3% to $30.69 billion from $31.63 billion.

Stock Price Performance: Between May 22, 2012 and August 21, 2012, the stock price fell $1.96 (-8.95%), from $21.89 to $19.93. The stock price saw one of its best stretches over the last year between August 2, 2012 and August 8, 2012, when shares rose for five straight days, increasing 10.6% (+$1.86) over that span. It saw one of its worst periods between February 16, 2012 and March 1, 2012 when shares fell for 10 straight days, dropping 15.5% (-$4.64) over that span.

Wall St. Revenue Expectations: Analysts predict a decline of 3.3% in revenue from the year-earlier quarter to $30.15 billion.

Key Stats:

An income boost this time around would be welcome news after profit drops in the past three quarters. Net income fell 90.6% in the fourth quarter of the last fiscal year, by 43.6% in the first quarter and again in the second quarter.

On the top line, the company is hoping to use this earnings announcement to snap a string of three-straight quarters of revenue declines. Revenue fell 3.5% in the fourth quarter of the last fiscal year and 7% in first quarter before falling again in the second quarter.

Analyst Ratings:

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.16 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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