CHICAGO, Feb. 23, 2011 /PRNewswire/ -- Zacks.com Analyst Blog features Hewlett-Packard Company (NYSE: HPQ), SAP AG (NYSE: SAP), Oracle (Nasdaq: ORCL), eBay (Nasdaq: EBAY) and The Home Depot Inc. (NYSE: HD).
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Here are highlights from Tuesday's Analyst Blog:
HP Beats but Guides Lower
Let's just say Leo Apotheker's first full quarter as CEO of Hewlett-Packard Company (NYSE: HPQ) was a rather inauspicious debut. Though HP posted an earnings beat of $1.36 per share in its fiscal 1st quarter of 2011 (ended January), topping the Zacks Consensus Estimate of $1.29 by 5.4%, revenues came in light to $32.3 billion, missing the Zacks consensus of $33 billion.
However, what has sent HPQ shares tumbling more than 9% in the after-market was HP's lower guidance for its fiscal 2nd quarter. The company expects EPS within a range of $1.19 to $1.21 per share; the Zacks consensus estimate was $1.26.
The big change at the helm -- Apotheker, former head of SAP AG (NYSE: SAP) took over for Mark Hurd, now Oracle's (Nasdaq: ORCL) President, last year -- along with 5 new board members, including former eBay (Nasdaq: EBAY) CEO Meg Whitman, was going to take some time to turn Hewlett-Packard around, but it seems these difficulties had already been priced-in by investors and analysts. The year 2010 was a rough one for HP, when its shares fell 18% on the year.
But things looked to be picking up -- 14% of that loss has been made up year-to-date...or rather it had, prior to 1st quarter numbers and 2nd quarter guidance was reported after the closing bell today. In fact, in the past 30 days, 6 upward revisions had been made on HPQ shares, and the most recent estimate was $1.32 per share.
And still the company beat those upwardly revised projections. HP's 1st quarter of 2011 marked the second consecutive positive surprise of more than 5%. So perhaps the ongoing late-trade sell-off Tuesday is a tad overdone. As of this blog's posting, HPQ shares are down $4.44 or 9.21% per share, following a 44-cent dip to $43.23 in an overall down day of regular trading.
Home Depot Positively Surprises
The Home Depot Inc. (NYSE: HD), surprised with its fourth-quarter 2010 adjusted earnings of 36 cents a share. The adjusted earnings not only surpassed the prior-year quarters' earnings of 24 cents (an increment of 50%), but also outpaced the Zacks Consensus Estimate of 30 cents.
For fiscal 2010, adjusted earnings grew by 21.1% to $2.01 a share from $1.66 in the prior fiscal year.
Financial Details
During the reported quarter, net sales inched up 3.8% year over year to $15,126.0 million compared with $14,569.0 million in the prior-year quarter, surpassing the Zacks Consensus Estimate of $14,800.0 million. The growth in net sales was primarily driven by an increase of 3.9% in total company comparable store sales and a rise of 4.8% in comparable store sales in the U.S.
Operating margin for the reported quarter has witnessed an improvement of 186 basis points (bps) to 6.86% compared with 5% in the prior-year quarter. Improvement in operating margin was primarily driven by effective cost management.
For full fiscal 2010, net sales increased 2.75% to $67,997.0 million compared with $66,176.0 million in the prior year, exceeding the Zacks Consensus Estimate of $67,681.0 million. The increase was primarily attributable to a surge of 2.9% in total company comparable store sales and 2.5% increase in comparable sales in the U.S. stores. Operating margin for the fiscal improved 133 bps to 8.59% compared with 7.26% in the prior fiscal year.
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