The share price of Hewlett&Packard, commonly known as HP, is losing nearly 10% today before the open amid weak results and lowered growth forecasts for the rest of the year:
EPS: $1.04 vs. $1.00 in Q2 2021
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Open account Try demo Download mobile app Download mobile appRevenue: $14.7 billion vs. $15.3 billion in Q2 2021 and $15.6 billion forecast (FactSet)
Net income: $1.1 billion vs. $1.2 billion in Q2 2021
EPS forecast for the current quarter: $0.79 to $0.89 vs. $1.05 forecasts
Revenue from sales of personal devices (laptops, PCs): $10.1 billion vs. $10.97 billion forecasts (FactSet)
Revenue from printer sales: $4.6 billion (down 6%)
- H&P was unable to escape macroeconomic pressures and slowdown, although management points to an improving supply chain;
- The company provided weakened annual earnings-per-share guidance, down from previous forecasts of $4.24 to $4.38 and below Wall Street estimates of $4.27. EPS forecasts for the third quarter of the year came in more than 20% below market expectations;
- The company was unable to escape macroeconomic pressures and a slowdown, although management pointed to an improving supply chain. The company's personal device and printer sales sector declined;
- Wall Street had expected EPS at the level the company reported, but a revenue decline of nearly 4% was worrisome. HP had previously reported projected EPS in the range of $1.02 to $1.08 so a result of 1.04 can be considered average;
- Total share repurchases and dividends from Hewlett&Packard amounted to $1.3 billion in the current quarter. In Q1, the purchase of 121 million shares of the company worth nearly $5 billion by Warren Buffett's fund, Berkshire Hathaway (BRKB.US). Funudsz still holds 11% of the company's shares. On Monday, HP announced the acquisition of Poly, which creates solutions for hybrid and remote work;
- HP is another device maker that has seen sales decline, previously reported by Intel (INTC.US), Micron (MU.US) and Dell (DELL.US), among others.
Hewlett&Packard (HPQ.US) stock chart, D1 interval. Demand has failed to pull the price above the 200-session moving average. Historically, levels below the average have proven to be a bargain for long-term investors, but the current economic outlook and the specter of recession may weigh on the company's performance for longer. The opening near $28 indicates a break of the 36.2 Fibonacci retracement, which has so far held back price declines. Source: xStation5
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