What To Expect From Hewlett-Packard’s Q2 FY’18 Earnings?

Hewlett-Packard (NYSE:HPQ) is scheduled to announce its fiscal second quarter earnings on May 29. In recent quarters, the company has reported growth across segments, with solid growth in compute and storage revenues. In addition, the company has successfully improved margins, due to which net income and earnings per share have increased in double digits in recent quarters. The company continues to focus on the consumer market for the computing segment, which has helped drive revenues.

For the fiscal second quarter, we expect the recent trend to continue, with Personal Systems revenues expected to increase 12-13% on a y-o-y basis to $8.6 billion. Within Personal Systems, notebook sales have increased due to the robust demand for Spectre x360 and the new line of Omen X gaming laptops. Similarly, desktop and workstation revenues are also expected to increase due to a corresponding increase in unit sales. Within the printing segment, hardware sales increased 14% while supplies sales increased 10% in the most recent quarter. We expect printing revenues to increase at high single digits to just over $5 billion. In addition, we forecast the company’s adjusted operating margin to expand 60 basis points to 9% for the quarter. Resulting net income and EPS are expected to increase 20% to $805 million and 48 cents, respectively, which is in line with consensus estimates. We have created an interactive dashboard that highlights our expectations for Q2’18. You can modify drivers such as segment revenues and margin figures to see how the company’s earnings would be affected in the quarter.

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