HPQ Set to Report Q1 Earnings: What's in the Cards for the Stock?

Core Viewpoint - HP Inc. is expected to report its first-quarter fiscal 2025 results on February 27, with anticipated non-GAAP earnings per share between 70 cents and 76 cents, reflecting a year-over-year decline of 8.6% in earnings, while revenues are projected to improve by 2.25% to $13.48 billion [1][2]. Group 1: Earnings Expectations - The Zacks Consensus Estimate for HP's earnings is set at 74 cents, indicating a decline compared to the previous year [2]. - In the last four quarters, HP's earnings surpassed the Zacks Consensus Estimate twice and missed on two occasions, with an average negative surprise of 0.83% [3]. Group 2: Performance Drivers - HP's performance in the first quarter is likely driven by strong momentum in the Personal Systems segment, although this is slightly offset by weakness in the Printing division [4]. - The introduction of AI-based computing devices is expected to have gained traction among consumers, contributing positively to top-line growth [5]. - The growing adoption of gaming experiences and the launch of new gaming products are anticipated to have bolstered HP's sales in the quarter [6]. Group 3: Challenges - Macroeconomic challenges, including high interest rates and inflation, are expected to negatively impact demand for consumer PCs, while enterprises are delaying IT spending due to economic uncertainties [7]. - The Printing division's sales are likely to be affected by reduced consumer demand in China and a competitive pricing environment, despite some growth in big tank printers [8]. Group 4: Earnings Prediction Model - The current model does not predict a definitive earnings beat for HP, as it has an Earnings ESP of 0.00% and a Zacks Rank of 2, indicating a potential for earnings to meet expectations but not exceed them [9].