Hewlett Packard (HPE) to Report Q4 Earnings: What's in Store?
Hewlett Packard Enterprise HPE is slated to report fourth-quarter fiscal 2022 results after market close on Nov 29.
For the fourth quarter, Hewlett Packard projects non-GAAP earnings between 52 cents and 60 cents per share. The Zacks Consensus Estimate for earnings is pegged at 57 cents, indicating year-over-year growth of 9.6%.
The consensus mark for quarterly revenues stands at $7.42 billion, suggesting a marginal increase of 0.9% from the year-ago period.
The company’s earnings surpassed Zacks Consensus Estimate twice in the trailing four quarters, matched once and missed on one occasion, the average beat being 4.8%.
Hewlett Packard Enterprise Company Price and EPS Surprise
Hewlett Packard Enterprise Company price-eps-surprise | Hewlett Packard Enterprise Company Quote
Factors Ahead Q4 Results
HPE’s fiscal fourth-quarter performance is likely to have benefited from strong momentum in the as-a-service platform and significant contributions from growth businesses, such as high-performance computing & modular cooling systems and Intelligent Edge. In the third quarter, total as-a-service orders grew more than 39% year over year, which was reflected in the top-line growth of 8% from this segment.
Accelerated digital transformation and higher demand for cloud networking due to the ongoing hybrid working wave are likely to have contributed to the fourth-quarter top line. Solid adoption of Aruba ESP (Edge Services Platform), which provides edge-to-cloud connectivity as a service, and its cloud services arm, HPE GreenLake, might have driven the to-be-reported quarter’s revenues.
Hewlett Packard’s gross margin is likely to have improved during the quarter, driven by a strong pricing discipline that would have mitigated rising supply & logistic costs, benefits from a positive mix shift toward high-margin software-rich businesses, cost takeouts and automation.
However, HPE expects to continue facing component shortages, higher commodity costs, foreign-exchange headwinds, and increased shipping fees for the next few quarters. These factors are likely to have negatively impacted its sales growth and profitability in the quarter under review.
What Our Model States
Our proven model does not conclusively predict an earnings beat for Hewlett Packard this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
HPE has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Dollar General DG, lululemon athletica LULU and Okta OKTA are some stocks that investors can consider, as these have the right combination of elements to post an earnings beat in their upcoming releases.
Dollar General has an Earnings ESP of +1.58% and currently carries a Zacks Rank #2. The company is slated to report its fourth-quarter fiscal 2023 results on Dec 1. DG’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 2.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dollar General’s fiscal fourth-quarter earnings stands at $2.55 per share, implying a year-over-year increase of 22.6%. DG is estimated to report revenues of $9.43 billion, which suggests a surge of 10.7% from the year-ago quarter.
lululemon athletica has an Earnings ESP of +4.91% and a Zacks Rank #2. The company is scheduled to report its third-quarter fiscal 2023 results on Dec 8. lululemon’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 10.4%.
The Zacks Consensus Estimate for LULU’s fiscal third-quarter earnings is pegged at $1.95 per share, indicating a 20.4% surge from the year-ago quarter’s $1.62 per share. The consensus mark for revenues stands at $1.80 billion, suggesting a year-over-year increase of 24.4%.
Okta has an Earnings ESP of +0.71% and carries a Zacks Rank #3 at present. The company is set to report its third-quarter fiscal 2023 results on Nov 30. OKTA’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 45.5%.
The Zacks Consensus Estimate for quarterly loss is pegged at 24 cents per share, suggesting a year-over-year decrease of 242.9%. OKTA’s quarterly revenues are estimated to increase 32.2% year over year to $463.6 million.
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Dollar General Corporation (DG) : Free Stock Analysis Report
lululemon athletica inc. (LULU) : Free Stock Analysis Report
Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report
Okta, Inc. (OKTA) : Free Stock Analysis Report
