What Can We Expect from Hewlett-Packard in Fiscal 3Q17?

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Part 5
What Can We Expect from Hewlett-Packard in Fiscal 3Q17? PART 5 OF 6

Can Hewlett-Packard’s Revenue Rise in Fiscal 2017 and Beyond?

Revenue growth of 4% YoY expected in fiscal 2017

We’ve already seen that analysts expect Hewlett-Packard’s (HPQ) revenue to rise 3.3% YoY (year-over-year) in fiscal 3Q17 to $12.3 billion. Analysts also expect the company’s revenue to rise 2.4% YoY to $12.8 billion in fiscal 4Q17 and 4.0% YoY to $50.2 billion in fiscal 2017.

EPS (earnings per share) for fiscal 4Q17 is expected to rise 22.2% YoY to $0.44, compared to $0.36 in fiscal 4Q16. It’s expected to rise 2.5% YoY in fiscal 2017 to $1.64, from $1.60 in fiscal 2016.

Analysts expect revenue growth for HPQ despite a declining PC (personal computer) market. At the end of 2Q17, PC shipments fell for the 11th consecutive quarter.

Can Hewlett-Packard&#8217;s Revenue Rise in Fiscal 2017 and Beyond?

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Pricing pressure might impact sales

In 2Q17, global prices for PCs rose, driven by component shortages for DRAM (dynamic random access memory), SSDs (solid state drives), and LCD (liquid-crystal display) panels. According to Gartner, “The approach to higher component costs varied by vendor. Some decided to absorb the component price hike without raising the final price of their devices, while other vendors transferred the costs to the end-user price.”

HPQ’s Personal Systems segment revenue has risen at a rate of more than 10.0% in the last two consecutive quarters despite a challenging macro market. The company expects products such as the EliteBook x360, the world’s thinnest laptop, and the ENVY Curved All-in-One desktop to drive sales in 2017. Printing revenue is also expected to rise YoY in 2017 as HPQ anticipates its supplies revenue to stabilize by the end of this year.

While Hewlett-Packard continues to improve PC sales, profit margins seem to be contracting. Analysts expect revenue to rise 3.4% YoY, while EPS is expected to fall 12.5% YoY to $0.42 in the quarter ended July 2017.


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