HPQ Gears Up to Report Q2 Earnings: What's in Store for the Stock?

HP Inc. HPQ is set to release its second-quarter fiscal 2025 results on May 28, after the market closes.

The Zacks Consensus Estimate for revenues is pegged at $13.36 billion, suggesting an improvement of 4.3% from the prior-year quarter.

HP expects non-GAAP earnings per share between 75 cents and 85 cents (midpoint 80 cents) for the second quarter of fiscal 2025. The Zacks Consensus Estimate for earnings has remained unchanged at 80 cents over the past 60 days and indicates a decline of 2.4% from the year-ago quarter’s EPS of 82 cents.

In the trailing four quarters, HPQ’s earnings surpassed the Zacks Consensus Estimate once and missed on three occasions, with an average negative surprise being 1.16%. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

Let’s see how things are shaping up for this announcement.

Factors Likely to Influence HPQ’s Q2 Results

HP’s overall second-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 second quarter of fiscal 2025. The Zacks Consensus Estimate for the Personal Systems segment’s second-quarter sales is pegged at $9.19 billion, reflecting year-over-year growth of 9%.

HPQ’s latest introduction of AI-based computing devices like the 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 second-quarter performance. The 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. The Zacks Consensus Estimate for the Printing division’s second-quarter sales is pegged at $4.24 billion, reflecting a year-over-year decline of 3%.

Earnings Whispers for HPQ Stock

Our proven model does not conclusively predict an earnings beat for HP this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Though HPQ carries a Zacks Rank #3 at present, it has an Earnings ESP of -1.25%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Per our model, Dell Technologies DELL, Nutanix NTNX and Salesforce CRM have the right combination of elements to post an earnings beat in their upcoming releases.

Dell Technologies is set to report first-quarter fiscal 2026 results on May 29. It has an Earnings ESP of +5.02% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Dell Technologies’ first-quarter earnings has been revised upward by 2 cents to $1.70 per share, indicating a year-over-year increase of 33.7%. DELL shares have tanked 30.1% over the past year.

Nutanix is set to report third-quarter fiscal 2025 results on May 28. It has an Earnings ESP of +5.26% and carries a Zacks Rank #3 at present.

The Zacks Consensus Estimate for Nutanix’s third-quarter earnings is pegged at 38 cents per share, unchanged over the past 60 days, indicating an increase of 35.7% from the year-ago quarter’s reported figure. Shares of NTNX have gained 9.6% over the past year.

Salesforce is scheduled to report first-quarter fiscal 2026 on May 28. It has an Earnings ESP of +0.76% and a Zacks Rank #3 at present.

The Zacks Consensus Estimate for Salesforce’s first-quarter earnings per share has remained unchanged at $2.54 over the past 60 days, indicating a year-over-year increase of 4.1%. Shares of CRM have risen 4% over the past year.

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

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