On September 5, 2017, Hewlett Packard Q3 earnings will be released. In this article, we outline what shareholders should expect from Hewlett Packard's (NYSE:HPE) third quarter report. Also, be sure to check back for an update and the live earnings conference call.
According to NASDAQ, consensus estimates for Hewlett Packard's Q3 EPS equate to $.26 (26 cents). For the same quarter last year, HPE reported EPS of $.49 (49 cents). In intraday trading, shares of Hewlett Packard Enterprise are down roughly 3% as investors await the third quarter earnings release. Interestingly, HPE stock dropped nearly 21% in the previous trading session.
HPE Q3 Earnings Update:
Adjusted EPS: $.30 (30 cents)
Revenue: $8.21 Billion
Full Year Guidance: $1.36-1.40 EPS (26-36 cents for Q4 EPS)
Items in Hewlett Packard Q3 Earnings
Seemingly, Hewlett Packard's most recent price drop was in response to the company's spinoff of its software segment. HPE completed this spinoff and the new entity merged with MicroFocus International. In return, Hewlett Packard received $8.8 billion in cash. Notably, this spinoff finalized HPE's loss on its acquisition of Autonomy.
In 2011, Hewlett Packard acquired Autonomy for $11 billion. Unfortunately, it was a terrible deal and it cost HPE shareholders billions of dollars. Certainly, investors are expecting to hear about this recently completed spinoff-merger in today's conference call.
Another important item in the Hewlett Packard Q3 earnings release is management's full-year guidance. HPE stated it would give adjusted guidance for FY17 in the third quarter earnings call. Based on how the stock is trading prior to earnings, the market is expecting lowered guidance.
HPE Stock Rating
Due to the bearish technical setup of HPE stock, The Stock Trader Blog is not adding HPE to either the Bullish List or the Bearish List. With regards to a long-term value investment, we believe investors should wait for Hewlett Packard's earnings volatility to stabilize. Of course, HPE stock trades at a conservative price-to-earnings ratio. However, this may very well be a value trap since the company is experiencing continual disruptions to its business.
Furthermore, a future contraction in the overall market would likely bode poorly for HPE shareholders. Therefore, we believe waiting for a market confirmation signal is ideal for a long-term value play on HPE stock. Preservation of capital through risk management is always of paramount importance.