HP Inc. HPQ is scheduled to report first-quarter fiscal 2025 on Feb. 27, after market close.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

HP expects non-GAAP earnings per share between 70 cents and 76 cents (midpoint 73 cents) for the first quarter of fiscal 2025. The Zacks Consensus Estimate for earnings is pegged at 74 cents, indicating a year-over-year decline of 8.6%.

The Zacks Consensus Estimate for revenues is pegged at $13.48 billion, suggesting an improvement of 2.25% from the prior-year quarter.

In the trailing four quarters, HPQ’s earnings surpassed the Zacks Consensus Estimate twice and missed on two occasions, with an average negative surprise being 0.83%.

Factors to Consider for HPQ

HP’s overall first-quarter fiscal 2025 performance is likely to have been driven by its strong momentum across the Personal Systems, slightly offset by softness in the Printing division.

Strength in the AI PC category, on the back of modern technological innovations and seamless customer experiences, is likely to have boosted the top-line growth for the first quarter of fiscal 2024.

HPQ’s latest introduction of AI-based computing devices like HP OmniBook Ultra Flip 14-inch Next-Gen AI PC, HP EliteBook X 14-inch Next-Gen AI PC, Z by HP Gen AI Lab, HP OmniBook X AI PC, HP EliteBook Ultra AI PC, HP OmniBook Ultra laptop and HP OmniStudio PC is likely to have gained traction among consumers, driving its top-line growth.

Growing adoption of gaming experiences by customers is likely to have aided the first-quarter performance. Latest gaming gears, including OMEN MAX 16 Gaming Laptop, OMEN 32x Smart Gaming Monitor, HyperX Pulsefire Saga Pro Wireless Gaming Mouse, HyperX Pulsefire Saga Gaming Mouse and OMEN AI, are likely to have boosted HPQ’s gaming sales, contributing to the top line in the to-be-reported quarter.

However, macroeconomic challenges like still-high interest rates and protracted inflationary conditions are expected to have negatively impacted the demand for HPQ’s consumer PCs. Furthermore, enterprises are postponing their large IT spending plans due to the weakening global economy amid ongoing macroeconomic and geopolitical issues. This might have hurt HP’s commercial PC sales in the to-be-reported quarter.

HP’s Printing division’s sales are likely to have been affected by softened consumer demand in China and an aggressive pricing environment, partially offset by growth in big tank printers.

What Our Model Says About HPQ

Our proven model does not conclusively predict an earnings beat for HPQ this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

Though HPQ currently carries a Zacks Rank #2, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Marvell Technology MRVL, Certara CERT and IonQ IONQ are some stocks that have a favorable combination.

Marvell Technology has an Earnings ESP of +2.77% and a Zacks Rank #2 at present. MRVL shares have gained 51.3% in the trailing 12-month period. MRVL is set to report its fourth-quarter 2024 results on March 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

Certara has an Earnings ESP of +4.00% and a Zacks Rank #2 at present. CERT shares have declined 25.6% in the trailing 12-month period. CERT is slated to report its fourth-quarter 2024 results on Feb. 26.

IonQ has an Earnings ESP of +35.14% and a Zacks Rank #3 at present. IONQ shares have gained 182.4% in the trailing 12-month period. IONQ is scheduled to report its fourth-quarter 2024 results on Feb. 26.

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HP Inc. (HPQ) : Free Stock Analysis Report

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IonQ, Inc. (IONQ) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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