Author Archives: Scalper1
HP Matches Wall Street Targets For Q1, Misses On Q2 EPS View
Personal computer and printer maker HP Inc. ( HPQ ) late Wednesday delivered in-line sales and earnings for its fiscal first quarter of 2016, but the midpoint of its EPS guidance for fiscal Q2 was below Wall Street’s target. HP stock rose a fraction in after-hours trading following the earnings news release. During the regular session Wednesday, HP climbed nearly 5% to 10.82. HP earned 36 cents a share excluding items on sales of $12.2 billion in the quarter ended Jan. 31. On a year-over-year basis, EPS and sales each dropped 12%. On a constant currency basis, factoring out foreign exchange impact, sales slid 5%. For the current quarter, HP expects non-GAAP earnings per share of 35 to 40 cents, or 37.5 cents at the midpoint. Analysts polled by Thomson Reuters had been modeling for HP to earn 39 cents a share ex items on sales of $11.94 billion in its fiscal second quarter. HP did not give a Q2 sales forecast. HP also reiterated its fiscal 2016 EPS guidance of $1.59 to $1.69 on a non-GAAP basis. Analysts have been targeting $1.60 EPS for the full year. PC and printer sales are mired in a prolonged slump. HP is the No. 2 maker of PCs worldwide with 19.9% market share by unit shipments in the fourth quarter, according to research firm IDC. Lenovo is No. 1 with 21.4% market share, IDC says. “We have a clear strategy that leverages our strengths, and we are focused on execution, taking cost out of the business and delivering innovations that will amaze our customers and partners,” HP CEO Dion Weisler said in a statement . “Although we have some tough quarters ahead, I am confident in the future.”
Etsy Jumps On Q4 Earnings, But Long Road To Catch eBay
Investors sent Etsy ( ETSY ) surging as the online crafts marketplace beat Wall Street’s expectations for its Q4 sales — an important quarter because of holiday sales. The Q4 sales haul reported Wednesday morning was up 35% to $87.9 million and Etsy reported a loss of 4 cents per share ex items. Analysts polled by Thomson Reuters had expected a 1 cent per share loss and sales of $86.5 million. Etsy is an online marketplace for uniquely crafted and curated goods from individual sellers. As such, Etsy has a narrower focus than much larger competitor eBay ( EBAY ), though like eBay it maintains no physical warehouses or distribution mechanisms. E-commerce giant Amazon ( AMZN ) has edged in on the crafts business idea, launching its Handmade at Amazon program last year. Etsy stock was up 6% to around 8 in afternoon trading in the stock market today . Etsy has a low IBD Composite Rating of 23, where 99 is the highest. Etsy’s chart has been a slippery slope. Debuting with an 88% pop from its April 16 IPO — it was priced at 16 and surged to as much as 35.74 in its first trading day– the stock has steadily declined. Though there were occasional pops, they were short-lived; even with the frenzied buying in the wake of Q4 earnings, Etsy stock still sits nearly 80% off its one-time high. Analysts are cautious about the stock but believe some upside is coming. “We believe growth will converge with overall e-commerce growth over the next couple of years as seller growth diminishes and marketing spend delivers declining yields,” Wedbush analyst Gil Luria wrote in a research note Thursday. Company executives offered 2016-18 compound annual growth guidance of 20% to 25% for revenue and 13% to 17% for gross merchandise sales. Etsy said 2016 should come in at the high end of the range for revenue and around the midpoint for gross merchandise sales. Thursday afternoon analysts polled by Thomson Reuters were modeling for about 25% revenue growth for 2016. Gross merchandise sales is the total dollar value of the goods sold over the Etsy platform. The analyst also noted that Etsy’s marketing spend grew 56% and its digital spend by 86%. “We believe management is content with the return on investment on this spend, this gap (between marketing and gross merchandise sales) is unsustainable and growth rates will be tested as marketing spend diminishes as a percent of revenue in 2016 (per guidance),” Luria wrote. Luria maintained his neutral rating and 12-month price target of 9. Etsy’s gross merchandise sales for 2015 came in at $2.39 billion vs. eBay’s gross merchandise volume of $82 billion. After eBay’s Q4 results, investors went into sell-off mode, sending the stock plunging. Shares were up 1.5% in afternoon trading Thursday. Wells Fargo analyst Matt Nemer wrote in a research note that investors may have overreacted to the earnings. Luria said the guidance was lower than what he expected. “In our view, eBay shares are one of the few inexpensive ways to play defense in a slowing consumer environment,” he wrote, adding that executives did not alter the firm’s outlook for its core business. Nemer acknowledged that eBay is in a “transition period,” but he says that in the long run the firm is a “highly stable, flexible, data-driven business that should provide some downside protection in the current environment.”