HP Stock Earnings Reaction - What's Ahead for HPQ Stock?

TL;DR

Hewlett-Packard (HP) reported lower-than-expected revenue, but higher earnings per share. The stock price fell by 5.7%. The analysis examines HP's financial indicators, such as dividend affordability, growth, balance sheet strength, and potential returns for investors.

Transcript

Hewlett-Packard reported yesterday after hours and it was not the best let's look at our software here real quick to see where hpq is currently and they're currently down 5.7 percent right now today to under 30 dollars so here's what happened they beat on earnings EPS was a dollar eight versus expected of a dollar four but Revenue was 14.7 billion ... Read More

Key Insights

• 💓 HP's earnings per share beat expectations, indicating strong operational performance.
• 💐 The company's dividend is sustainable, given its low percentage of free cash flow.
• ❓ HP has consistently bought back shares, potentially providing value for investors.
• 💦 The stock price drop after the earnings report may present an opportunity for value investors.
• 🍝 Revenue growth has been positive over the past five years.
• 💪 HP boasts a strong balance sheet with significant cash reserves.
• 📽️ Analysts are projecting growth in earnings per share but anticipate declining revenue for the company.

Questions & Answers

Q: Why did Hewlett-Packard's stock price drop by 5.7% after its earnings report?

The stock price dropped due to the lower-than-expected revenue figures, even though the company beat earnings expectations.

Q: How affordable is Hewlett-Packard's dividend?

Hewlett-Packard's dividend is considered affordable as it accounts for less than 25% of the company's average free cash flow in the past five years.

Q: What is HP's revenue growth over the past five years?

HP has experienced positive revenue growth of $10 billion over the past five years.

Q: How does Hewlett-Packard's balance sheet look?

Hewlett-Packard has a strong balance sheet, with $23.5 billion in cash on hand and the ability to pay off over half of its total debt.

Summary & Key Takeaways

• HP beat earnings expectations with an EPS of $1.08 compared to the expected $1.04, but revenue was lower than anticipated at $14.7 billion instead of $15.74 billion.

• The company's dividend, accounting for 3.2% of its healthy free cash flow, can be easily sustained as it represents less than 25% of the average free cash flow from the past five years.

• HP has consistently bought back shares, indicating potential value. The company has shown revenue growth of $10 billion, net income growth of $2 billion, and free cash flow growth of $1.3 billion in the past five years.