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Hewlett Packard (HPE) to Post Q4 Earnings: A Beat in Store?

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Hewlett Packard (HPE) to Post Q4 Earnings: A Beat in Store?

Hewlett Packard's (HPE) fiscal Q4 revenues are expected to benefit from solid performance of most of its segments, especially Intelligent Edge solutions.

Hewlett Packard Enterprise Company HPE is expected to report fourth-quarter fiscal 2018 results on Nov 20.

The company pulled off a positive earnings surprise of 15.79% in the last reported quarter. Notably, Hewlett Packard beat the Zacks Consensus Estimate in each of the trailing four quarters, the average positive surprise being 19.22%.

For the upcoming quarterly results, the company expects earnings per share between 39 cents and 44 cents.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Hewlett Packard Enterprise is benefiting from its Intelligent Edge solutions. Moreover, strong customer traction with Edgeline IoT Systems also makes us optimistic.

Notably, in the last reported quarter, Hewlett Packard’s Aruba platform won a number of new deals with key customers like Caesars Entertainment and University of Arkansas.

The company’s recent collaboration with PLDA to develop Gen-Z semiconductor IP and the introduction of HPE GreenLake Hybrid Cloud in the last reported quarter are expected to prove beneficial for the company.

The company expects increased operational improvement and organic growth driven by improved sales productivity and growing customers for storage offerings. In July, Hewlett Packard updated HPE InfoSight offering across its 3PAR portfolio to include intelligent all-flash storage. Moreover, next-generation HPE Nimble Storage was also launched. These offerings are expected boost the growth rate of the storage segment in the to-be-reported quarter.

Hewlett Packard also expects the uptrend of expanding margins to continue in the fiscal fourth quarter due to improved revenue mix.

Nonetheless, we remain slightly cautious about the company’s near-term prospects due to the challenges like pressure from competitive pricing and increased DRAM prices. Foreign exchange headwinds are likely to continue as well.

Hewlett Packard Enterprise Company Price and EPS Surprise

Hewlett Packard Enterprise Company Price and EPS Surprise | Hewlett Packard Enterprise Company Quote

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or #5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hewlett Packard has an Earnings ESP of +0.33% and carries a Zacks Rank #3.

Some Other Stocks With Favorable Combination

Here are few other stocks, which per our model have the right combination of elements to post an earnings beat this quarter:

Bitauto Holdings Limited BITA has an Earnings ESP of +12.36% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Science Applications International Corporation SAIC has an Earnings ESP of +0.88% and carries a Zacks Rank of 3.

Palo Alto Networks, Inc. PANW has an Earnings ESP of +0.06% and carries a Zacks Rank of 3.

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