What’s Expected of HPE in Q4 2018?



Average revenue estimate of $15.1 billion

The last two months have been volatile for the markets. The broader indexes saw red on November 19 driven by a sell-off in the technology sector.

The Power Shares QQQ Trust, Series 1 ETF (QQQ) has fallen 14%, while the Technology Select Sector SPDR ETF (XLK) has fallen 15% since the start of October. Hewlett Packard Enterprise (HPE) has also been affected, with its stock slipping 11% since October. HPE’s upcoming earnings will be critical, as any deviation from the average estimates could result in a further price correction.

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Analysts expect HPE to post revenue of $7.84 billion in the fourth quarter of fiscal 2018 (which ended in October), a 2.4% rise year-over-year compared to $7.66 billion in the fourth quarter of fiscal 2017. Analysts expect HPE’s non-generally accepted accounting principles EPS to rise 39% from $0.31 to $0.43 in the period.

HPE has beaten analysts’ estimates in each of the last four quarters

As we can see in the chart above, HPE has managed to beat analysts’ earnings estimates in each of the last four quarters. In the third quarter of fiscal 2018, it reported EPS of $0.44, 19% higher than the estimate of $0.37. It beat the earnings estimate of $0.31 by 9.7% in the second quarter with reported EPS of $0.34.

HPE also beat analysts’ earnings estimate of $0.22 by 54.5% in the first quarter of fiscal 2018, reporting EPS of $0.34. It reported EPS of $0.31 in the fourth quarter of fiscal 2017, 10.7% higher than the estimate of $0.28.

HPE is scheduled to announce its fiscal 2018 fourth-quarter earnings results on December 4.


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