Hewlett-Packard Company (NYSE:
HPQ) is scheduled to release its Q2 2010 results after the market closes on May 18, 2010. Although HPQ is expected to beat consensus this quarter, the recent acquisitions might weigh on earnings. However, the Company will continue its phenomenal growth whatsoever.
Hewlett Packard is one of the leading global providers of computing and imaging solutions and services for business and home. The company is focused on capitalizing on the opportunities of the Internet and the proliferation of electronic services. Its major businesses include Imaging and Printing Systems, Computing Systems and Information Technology Services
As for the Q1 of 2010, HPQ reported GAAP net earnings for the quarter of $2.25 billion and a revised GAAP EPS of $0.93 - down from GAAP net earnings of $2.32 billion and GAAP diluted EPS of $0.96 - as previously reported on Feb. 17, 2010. Q1 revenue was up 9% in the Americas to $13.6 billion. Revenue was up 1% in Europe, the Middle East and Africa and 26% in Asia Pacific to $12.1 billion and $5.4 billion, respectively. When adjusted for the effects of currency, revenue was up 7% in the Americas, down 1% in Europe, the Middle East and Africa and up 19% in Asia Pacific. Revenue from outside of the United States in the first quarter accounted for 65% of total HP revenue, with revenue in the BRIC countries (Brazil, Russia, India and China) increasing 41% over the prior-year period while accounting for 10% of total HP revenue. Finally, cash flow from operations for the quarter amounted to $2.4 billion, up 114%, or $1.3 billion from the prior year.
Analysts' estimates for Q2 2010 range from a low of $1.04 to a high of $1.09, compared to a consensus estimate of $1.05, with number of estimates being 29 and the co-efficient variance 1.22. Revenue is expected to be in the range of $29.4 billion to $29.7 billion, with the non-GAAP EPS between $1.03 and $1.05. Also, Q2 may experience approximately $0.04 of OI&E expense, a tax rate of approximately 22%, and an expectation for a modest decline in weighted average shares outstanding. On April 28, HP and Palm, Inc. announced that they have entered into a definitive agreement under which HP will purchase Palm, a provider of smartphones powered by the Palm webOS mobile operating system, at a price of $5.70 per share of Palm common stock in cash or an enterprise value of approximately $1.2 billion. The combination of HP's global scale and financial strength with Palm's unparalleled webOS platform will enhance HP's ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets. On April 12, 2010 HP announced its acquisition of 3Com Corporation at a price of $7.90 per share in cash or an enterprise value of approximately $2.7 billion.
The stock closed at $46.73, down 3.31% on May 7, 2010 and most analysts' rate the stock as a relative Overweight with an average price target of $60.50.
