What To Expect From Hewlett-Packard's Earnings

Hewlett-Packard Company HPQ is scheduled to report its second quarter results after Thursday's market close.

The Estimize consensus estimate (based on 41 estimates) is calling for the company to earn $0.88 per share on revenue of $25.962 billion. This compares to the Wall Street consensus estimate that is looking for the company to earn $0.86 per share on revenue of $25.794 billion.

Deutsche Bank: Shares Inexpensive, Split A Catalyst

Sherri Scribner commented in a note that shares are the tenth least expensive stock in the S&P 500 on a CY-15 P/E basis, and is also the lowest priced large-cap U.S. tech stock.

Heading in to the quarterly print, Scribner argued that the company is well-positioned to benefit from growth in emerging segments like Cloud, Big Data, and Converged Infrastructure.

Looking passed the second quarter print, the analyst noted that while management's $3 billion cut to its 2015 free cash flow guidance was a "significant surprise" to investors, but looking beyond various one-timers, HP's free cash flow generation remains "robust."

Finally, Scribner stated that investors will have two attractive options post-split: The HP Inc. business will focus on cash returns to shareholders while the Enterprise business will see improving margins and growth driven by the company's strong position in emerging segments like Cloud.

RBC: Near-Term Bias to The Upside

Amit Daryanani commented in a note that there exists a near-term bias to the upside as the post-earnings conference call should provide commentary that the company's free cash flow isn't worsening.

Daryanani is expecting HP to provide explicit targets for dis-synergies ($600 million to $800 million), specify levers to offset dis-synergies (restructuring of $1.0 billion to $1.5 billion), reiterate fiscal 2015 free cash flow expectations of $3.5 billion to $4.0 billion, and indicate that foreign exchange won't be a further headwind and could actually provide upside if the company was conservative with its rate exchange assumptions.

Looking past the quarter, Daryanani is expecting the company to realize its $7.0 billion free cash flow guidance over the next two years. Beyond that, the company will partake in large acquisitions to enable the transformation of HPE.

Wells Fargo: Guidance Could Be Boosted By Aruba Acquisition

Maynard Um commented in a note that HP is expected to deliver an in-line quarter, but the company's cash flow could "recover" as prior one-timers and special events should not all recur. As such, the company should reiterate its cash flow guidance of $3.5 billion to $4.0 billion.

Um further stated that several of HP's business should "start bottoming" and the upcoming corporate split should unlock shareholder value.

In addition, HP could benefit see benefits from its Aruba acquisition on May 18, which could lead to a slight tightening of the guidance above the low end depending on the timing of any sales of its H3C networking unit.

In a separate note, Um estimated the timing of the of the sale should lead to an incremental $0.04 in earnings per share and $100 million in free cash flow in the second half of the fiscal year. In addition, the timing of the close means the incremental earnings per share and cash flow from its Aruba acquisition would be "purely accretive" to fiscal 2015.