What's in the Offing for HP (HPQ) This Earnings Season?

HP Inc (NYSE:HPQ). HPQ will report fourth-quarter fiscal 2020 results today after the closing bell.

The company estimates non-GAAP earnings between 50 cents and 54 cents. The Zacks Consensus Estimate for quarterly earnings is pinned at 52 cents per share, indicating a 13.3% year-over-year decrease. The consensus mark for revenues is pegged at 14.55 billion, suggesting a year-on-year decline of 5.6%.

The company’s earnings surpassed estimates in all of the trailing four quarters, the surprise being 13.4%, on average.

Let’s see how things have shaped up for the upcoming announcement.

Factors at Play

HP’s fiscal fourth-quarter performance is likely to have benefited from solid demand for personal systems, driven by the remote-working and online-learning trends amid the COVID-19 pandemic. Nevertheless, industry-wide CPU and panel supply constraints might have affected its ability to meet demand.

HP Inc. Price and Consensus

HP Inc. price-consensus-chart | HP Inc. Quote

For the printing segment, HP had earlier projected improvements from the fiscal third-quarter level across units, revenues, supplies revenues, profit dollars and margin rate. However, from on the demand front, the company had anticipated commercial print to be depressed during the quarter under review.

Additionally, adverse foreign-currency fluctuations and macroeconomic woes are the key concerns this earnings season.

What Our Model Says

Our proven model does not predict an earnings beat for HP this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

HP currently carries a Zacks Rank of 4 (Sell) and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

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

Deere (NYSE:DE) & Company DE has an Earnings ESP of +17.06% and sports a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Toronto-Dominion Bank TD has an Earnings ESP of +14.02% and carries a Zacks Rank of 2, at present.

Signet Jewelers (NYSE:SIG) Limited SIG has an Earnings ESP of +13.95% and currently carries a Zacks Rank of 2.

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