Tag Archives: stocks
Hewlett Packard Enterprise Still Wrestles With Cisco, Juniper
One day before Hewlett Packard Enterprise ( HPE ) was slated to post fiscal Q1 earnings, the stock of half of the old computing pioneer Hewlett-Packard Co. was up 4% in afternoon trading in the stock market today . The stock was doing what analysts expect it to do, outperforming the other half of the legacy company, HP Inc. ( HPQ ), whose shares were up a fraction this afternoon. The stocks, of course, reflect the market’s interpretation of the companies’ operational performance since splitting into two from the legacy corporation in November. HP, which reported earnings last week, kept the PC and printer businesses — and the old HPQ ticker. Hewlett Packard Enterprise kept the server, storage, networking, enterprise-software and cloud-migration businesses, seen as faster-growing endeavors, and kept the CEO, Meg Whitman, who still chairs both companies. Hardware and equipment-product sales comprise about 38% of Hewlett Packard Enterprise revenue, with services generating the rest. For the quarter ended Jan . 31, analysts polled by Thomson Reuters expect HPE to report earnings down 17% to 40 cents per share on revenue down 2.7% to $12.68 billion, vs. a pro forma 48 cents on $13.03 billion in the 2015 Q1. The company reports after the market close. HP Inc.’s Q1 EPS and sales each fell 12%, to 36 cents and $12.2 billion. For its first fiscal year ending in October, Hewlett Packard Enterprise expects EPS minus items of $1.85-$1.95, up from the $1.84 pro forma earned in 2015, on revenue of $50.81 billion, down 2.5% from the pro forma $52.12 billion of 2015. Analysts have modeled $1.87 and $50.73 billion. “We like HPE because decent execution should be sufficient to move the stock higher,” said UBS analyst Steven Milunovich in a February research note. “We believe growth in servers, networking and storage, stabilization in high-margin technology services and continued improvement in the Enterprise Services margin should help close the gap between the current P/E of 7x and our target of 10x. “Storage head Manish Goel, as well as a few of our industry sources, say that HPE is taking business from Dell/ EMC ( EMC ) during their proposed merge. Still, we think it’s time for Meg Whitman to provide a vision for the company. IBM ( IBM ) has cognitive computing. What does hardware-heavy HPE want to be in 3-5 years and what will be its differentiation?” Nomura doesn’t cover HPE, analyst James Chen advised IBD Wednesday, but he and colleague Jeffrey Kvaal are watching closely as HPE competes with companies that Nomura does cover, such as Cisco Systems ( CSCO ), Juniper Networks ( JNPR ) and Arista Networks ( ANET ). Nomura said he expects 3% sales growth for HPE’s enterprise group this fiscal year, compared with Cisco and Juniper’s guidance ranges of 3% to 6%. Hewlett Packard Enterprise’s “projected growth rates are not likely to threaten networking incumbents, but don’t imply much share loss either,” the Nomura analysts said in a research note. HPE’s hybrid cloud business competes with IBM, Microsoft ‘s ( MSFT ) Azure, Amazon ( AMZN ) Web Services and Alphabet ‘s ( GOOGL ) Google Cloud Platform services. Big Data startup Hortonworks ( HDP ), the Hadoop developer, on Tuesday said it would collaborate with HPE on the use of Apache Spark, making use of shared memory in HPE enterprise environments. UBS analyst Mulinovich, in his February note, said that “upon the split we argued in favor of HPE over HPQ stock. . . . Hewlett Packard Enterprise has momentum with expected slight revenue growth in constant currency and an improving operating margin in fiscal 2016.” Wednesday afternoon, Hewlett Packard Enterprise stock was 13% off its Dec. 1 record high of 15.88, while HP Inc. was 26% off its record high of 14.82, set Nov. 24.
Will Stratasys Q4 Earnings Justify Rebound in 3D Printer Stocks?
The health of the battered 3D printer industry will come into focus when Stratasys ( SSYS ) reports fourth-quarter earnings Thursday morning. Shares of Stratasys and 3D Systems ( DDD ) have been crushed since mid-2014, as both have posted disappointing quarterly earnings reports going back more than a year. But both stocks have rebounded in the past month or more. Stratasys stock is up 43% since hitting an all-time low of 14.88 on Jan. 26. 3D Systems stock has nearly doubled since hitting an all-time low of 6 on Jan. 20. ExOne ( XONE ) is up more than 60% from its low of 6.61 on Jan. 20. Voxeljet ( VJET ) is up nearly 35% from its all-time low of 3.50, also on Jan. 20. Stratasys stock was up 5%, above 21, in midday trading in the stock market today , while 3D Systems stock was up 3%, near 12. “There are no signs of a broad-based recovery yet, in our view, so demand commentary from Stratasys will be important,” wrote Weston Twigg, an analyst at Pacific Crest Securities, in a research note. Stratasys is expected to report Q4 revenue of $168.3 million, down 22% from Q4 2014, to mark its second quarter in a row of declining sales. The consensus on earnings per share minus items, according to a Thomson Reuters survey, calls for the company to swing to a 12-cent per-share loss from a 48-cent profit in the year-earlier quarter. Cowen analyst Robert Stone on Tuesday cut his price target on Stratasys stock to 19 from 25, as he lowered revenue expectations. “An industry rebound is not yet visible amid weak global capital spending trends,” Stone wrote in a research note. Meanwhile, 3D Systems last week delayed its Q4 earnings report for reasons “related to the completion of work related to the goodwill and intangible asset impairment charge.” It preannounced Q4 revenue expectations of approximately $183 million, down 2% and the second quarter in a row of falling sales but above the consensus estimate of $161 million. In December, 3D Systems announced it would discontinue its consumer 3D printer line. “While the better-than-expected revenue (of 3D Systems) is encouraging, we would caution not to read too much into Q4 in terms of any normalizing revenue run rate,” wrote Canaccord Genuity analyst Bobby Burleson in a research note.