HP’s Apotheker on CB After The Bell

Hewlett-Packard’s boss Leo Apotheker be on CNBC right after the tech giant releases numbers for its fiscal first quarter this afternoon at 4:05 PM ET. Apotheker will give us a breakdown of the report. Analysts surveyed by Thomson Reuters are looking for EPS $1.29, with revenue at $32.96 billion.

‘Buy’ Ratings: $55 Price Target

Both Louis Miscioscia, Managing Director of IT Hardware, Supply Chain & Business Services Equity Research at Collins Stewart and Kaushik Roy, analyst with Wedbush Morgan Securities have ‘buy’ ratings on HP with a $55 price target.

Breaking Down The Quarter

For the quarter Roy expects gross margin to improve does to “lower component costs” and “increasing revenue contribution from higher margin businesses” like networking and storage.

Miscioscia believes “HP will say that tech trends remain decent, world wide, their fundamental business is sound, and they look to focus more on the enterprise (than consumer), in the areas of networking, storage, servers and services.” Miscioscia reminded me that with a tech company as big as HP, with a market cap of $105 billion there’s “no one area that really moves the needle tremendously.”

On the conference call, Roy expects to hear about the following:

  • 1) Overall demand in the IT segment
  • 2) Spending in the public sector
  • 3) Demand in Europe
  • 4) Gross margin trends & component pricing
  • 5) Any impact of Intel’s Sandy Bridge delay
  • 6) Pricing environment in the networking business and competition with Cisco
  • 7) Tablet cannibalization and expectations for their WebOS products
  • 8) Share buy-back

All Eyes on Apotheker

HP is hosting an analyst meeting in a few weeks, on March 14th. All eyes will be on Apotheker when he outlines HP’s strategy. Miscioscia wants to know, whether it will be a “bunch of smaller acquisitions, big one or both?”

Roy also pointed out “investors are unsure about his strategy” and meeting Apotheker at the meeting should “improve investors’ comfort level with him.”

Tune into Closing Bell at 4PM ET for full HP analysis and our interview with Leo Apotheker.

Miscioscia: No conflicts

Roy: Firm owns shares of HPQ



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