HPQ Set to Report Q3 Earnings: What's in Store for the Stock?

HP Inc. HPQ is slated to release third-quarter fiscal 2026 results on Aug. 26.

The Zacks Consensus Estimate for revenues is pegged at $14.60 billion, suggesting an improvement of 4.8% from the prior-year quarter.

HP expects non-GAAP earnings per share between 61 cents and 71 cents for the fiscal second quarter. The Zacks Consensus Estimate for earnings has remained unchanged at 66 cents over the past 30 days, suggesting a year-over-year decline of 12%.

In the trailing four quarters, HPQ’s earnings matched the Zacks Consensus Estimate in one of the trailing four quarters and surpassed thrice, with an average surprise of 6.7%.

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

Factors Likely to Influence HPQ’s Q3 Results

HP’s fiscal third-quarter performance is likely to have been supported by continued momentum in the Personal Systems business, particularly from AI PCs, premium PCs and higher-margin attached services. In the second quarter, Personal Systems revenues increased 13% year over year, with AI PCs, advanced compute solutions and workforce solutions delivering double-digit revenue growth. Strength in the AI PC category, driven by Windows 11 refresh cycles and increased adoption of AI PC, is likely to have boosted top-line growth.

The ongoing Windows 11 refresh cycle and demand for AI at the edge are also expected to have supported HPQ’s prospects in the fiscal third quarter. Management noted that around 30% of the installed PC base was still on Windows 10 at the end of the fiscal second quarter, leaving room for additional refresh activity. HP also expects structural demand for AI PCs and premium PCs to remain strong as customers increasingly move AI workloads toward the edge for benefits such as lower latency, privacy and lower costs.

Growing customer adoption of gaming experiences is expected to have aided the fiscal third-quarter performance. The company’s wide portfolio of gaming gear, which includes 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, is likely to have boosted HPQ’s gaming sales, contributing to the top line in the to-be-reported quarter.

However, rising memory prices are likely to have weighed on HP’s profitability in the fiscal third quarter. Memory and storage solution providers are redirecting their resources toward high-margin memory used in AI servers and data centers. This shift has tightened supply for standard DRAM and NAND for laptops and desktops, which has pushed memory prices sharply higher. Since memory accounts for a meaningful portion of a PC’s total build cost, rising prices are eroding PC vendors’ margins.

HP expects inflationary pressures beyond memory and storage, including higher oil prices and related transportation costs. In Print, rising resin and transportation costs are expected to have pressured margins in the fiscal third quarter, while incremental hardware placements and normal seasonality are also likely to have weighed on profitability. Management expects Print operating margins to be near the lower end of its long-term range in the third quarter of fiscal 2026.

Earnings Whispers for HPQ

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

HPQ has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks you may want to consider in the broader Zacks Computer and Technology sector, as our model shows that these have the right combination of elements to post an earnings beat:

Dell Technologies DELL has an Earnings ESP of +6.42% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dell Technologies is slated to report second-quarter fiscal 2027 results on Sept. 1. The Zacks Consensus Estimate for DELL’s second-quarter earnings is pegged at $4.88 per share, down by a penny over the past 30 days, indicating a rise of 110.3% from the year-ago quarter’s reported figure.

Hewlett Packard HPE has an Earnings ESP of +9.96% and carries a Zacks Rank #2 at present.

Hewlett Packard is set to report third-quarter fiscal 2026 results on Sept. 2. The Zacks Consensus Estimate for HPE’s third-quarter earnings is pegged at 94 cents per share, up by a penny over the past 30 days, indicating a rise of 113.6% from the year-ago quarter’s reported figure.

Intuit INTU has an Earnings ESP of +0.08% and carries a Zacks Rank #3 at present.

Intuit is set to report fourth-quarter fiscal 2026 results on Aug. 25. The Zacks Consensus Estimate for INTU’s fourth-quarter earnings is pegged at $3.59 per share, unchanged over the past 30 days, indicating a rise of 30.6% from the year-ago quarter’s reported figure.

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

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