Next week, the big earnings news will likely come from Hewlett-Packard which reports after the market closes Tuesday. Be prepared for some good news and some bad news.
First the bad news....
Soft spending by large corporations is expected to have hurt H-P in its latest quarter, as it hurt rival IBM results. IBM reported last month that all its major business units suffered declines in the first three months of 2009, a sign that companies are still hunkered down because of the financial crisis despite some encouraging signs that things are easing.
HP and IBM are in many overlapping businesses, so the results of one often suggest something about the results of the other, though some of HP's businesses, especially personal computers and printer supplies, expose it more to fluctuations in consumer spending, which is also down because of the recession.
Now the good news...
As you might remember Intel CEO, Paul Otellini told CNBC earlier in the week that PC sales have "bottomed out," -- and market research firm IDC reported that global PC shipments fell less than expected in the first quarter, and could turn around by the end of the year.
That's significant for HP because the company depends on PC sales for about a third of its overall revenue.
What should you expect?
Dinesh Moorjani, an analyst with Broadpoint AmTech, says weak spending by large corporations on computer servers and storage, and softness in printing supplies — printer ink is a profit machine for HP — will drag down sales. But cost-cutting should cushion the blow to earnings.