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For most of the tech sector, the latest earnings-reporting season is in the books. But, as always, there are a few bells that don’t follow the traditional calendar to tell Wall Street business how it’s going. Last quarter.
Dell Technologies is one of the three still on time for its earnings reports (NYSE:DELLOn August 25th, it announced its fiscal second quarter results and HP Inc.NYSE:HPQ) and Hewlett Packard Enterprise (NYSE:HPE) are both scheduled to report their fiscal third quarter on August 30. According to some tech industry analysts, the three tech titans could be heading into the final phase with many questions hanging over the sector. year.
Bernstein analyst Tony Sacconaghi said one of the top topics on investors’ minds right now is the health of the overall PC market. And when it comes to PCs, Sacconaghi pulls no punches, describing the sector’s “fairy tale of three markets” status.
Sacconaghi said those “markets” are charging Chromebooks, weakness in the consumer segment and the enterprise market as “hanging out.” Sacconaghi said HP ( HPQ ) is “more exposed” in terms of customer exposure to the consumer PC market.
“We continue to see a slowdown in consumer PCs,” Sacconaghy said, adding that total unit shipments in the second quarter of this year could be down double-digit percent from a year earlier. Sacconaghi also said the Chromebook market is “falling off a cliff” and is down 50% in the second quarter from the same period in 2021.
Sacconaghy, which maintains market performance on HP ( HPQ ) stock, revised its estimate for HP ( HPQ ) for the quarter to $1.01 a share, on revenue of $15.4B, below Wall Street’s consensus estimate of $1.05 per share. a share, on $15.84B in revenue.
As for Dell ( DELL ), Sacconaghi said he is “very confident” in the company’s ability to meet or exceed Wall Street’s expectations for its quarterly results. Sacconegy Dell ( Dell ) appears to be coping well with accounting issues, and is growing its backlog in its infrastructure solutions group. [ISG]This includes servers, storage and networking products.
Sacconaghi has an outperform rating on Dell’s ( DELL ) stock and expects the company to post a profit of $1.72 billion on revenue for the second quarter, beating consensus estimates of $1.64 a share on earnings of $26.5B. in income.
Sacconaghi feels the same way about Hewlett Packard Enterprise ( HPE ) as he does about Dell ( Dell ), with the enterprise computing company raising its inventory levels over the past three months to reflect improvements in its supply chain.
“The performance of the quarter is largely based on performance,” said Sacconaghy, who said the company is seeing “very, very strong” demand at the HPE Discover event in late June. Sacconaghi also said that HPE (HPE) is in a good position in the company’s end market and should not be exposed to consumer products such as PCS.
Sacconaghi has an outperform rating on HPE’s ( HPE ) stock and expects third-quarter earnings of 49 cents on $6.94B in revenue, compared with earnings of 44 cents a share on sales of $6.96B.
Along with Sacconegi’s moves against major computer companies, Wells Fargo analyst Aaron Ruckers was cautious about HP ( HPQ ) ahead of the results. Investors cut the rating on HP ( HPQ ) to underperform, expecting weak demand from the PC market.
