On Thursday, global information technology company HP Inc. (HPQ, Financial) will release financial results for the first quarter of fiscal 2018, and analysts are predicting a net profit of 42 cents per share for the quarter ended Jan. 31.
The projection is a mean of 18 estimates ranging from 40 to 43 cents.
Source: Yahoo Finance
If the Palo Alto, Calif-based company meets consensus, it will reflect a 10.5% growth from a year ago when it closed the first quarter of fiscal 2017, returning to its shareholders 38 cents per diluted share and dividend at 35% rate of earnings.
Analysts' estimates for first three months of fiscal 2018 are on quarterly revenue of $13.48 billion, a 6.30% increase on a year over year basis. The figure is a mean of 16 estimates that range between a low of $12.71 billion and a high of $13.96 billion.
According to analysts, the first quarter growth in HP's revenue is part of a process that will see revenue progressing to $54.05 billion in full fiscal 2018, which will be a 3.80% development from the actual figure of full fiscal 2017.
The chart below offers a shot of Hewlett-Packard’s revenue in recent quarters. The bars ndicate predictions for 2018 and 2019. I have omitted data before fiscal 2016 because on Nov. 1, 2015, Hewlett-Packard split the PC and printer business from its enterprise products and services business. Since then, there are two publicly traded companies: HP Inc. and Hewlett Packard Enterprise (HPE).Â
GuruFocus gives HP Inc. a growth and profitability rating of 5 out of 10. This is a measure of the historical capability of HP Inc. of generating income and returning it to the company itself and to shareholders under the form of dividend paid.
The shareholders are currently benefitting from a quarterly dividend of 13.9 cents per common share, for an annual forward of 56 cents per share and a forward yield of 2.60%. For the 52-weeks through Feb. 16, shareholders of the company were remunerated with a nearly 33% appreciation of HP Inc. on the NYSE. The stock outperformed the S&P 500 index by 17%:
Source: Yahoo Finance
Trying to project the information of the technology company in the future, analysts foresee a 5% growth in earnings from full fiscal 2018 to full fiscal 2019 and a 6.90% average annual growth over the next five years.
For the following 52 weeks of trading, analysts foresee a 15% appreciation of the stock to an average price target of $24.53 from the current valuation of $21.40. The stock has a recommendation rating of 2.3 out of a total of 5.
The overall financial situation of Hewlett-Packard can be summarized in GuruFocus giving a financial strength rating of 5 out of 10.
HP Inc. is now trading its earnings (ttm) at 14.36 times per share (versus an industry average of 19.94 times) and its sales (ttm) at 0.70 times per share (versus an industry average of 1.11 times). The forward PE ratio is 11.72 times (versus an industry average of 16 times) that, when multiplied by the EPS of $1.81 yields a value of $21.21 per share.
HP Inc. has a market cap of $35.21 billion and the 52-week range is $15.93 to $24.10 per share.
According to GuruFocus, Hewlett-Packard is reporting a volume of 1,645.23 million shares outstanding, of which 82.05% is held by institutions and 0.34% is held by insiders.
Among the top institutional holders, the Vanguard Group, Inc. stands out with 7.71% of Hewlett-Packard’s total shares outstanding, followed by Blackrock Inc. with 6.66% and Dodge & Cox Inc with 5.12%. Figures on these three top shareholders’ holdings are as of Dec. 30, 2017.
(Disclosure: I have no positions in any security mentioned in this article.)
