>>What is puzzling me (beyond belief) is how they can expect to disappoint Wall Street for eight straight quarters.
Patricia, what you are overlooking is that the numbers being missed are the analysts' numbers, not HP's numbers! HP (and publicly held companies in general) do not forecast specific revenue or earnings numbers to the market; they'd have legal problems if they did unless they hit them on the button. They meet with analysts and discuss their business model and then the analysts make their own guesses. If HP has not met the numbers for eight quarters, blame the analysts for consistently over estimating the profit potential in HP's business arena. You'd think they'd learn after 3 or 4 times, wouldn't you?
Instead of focusing on HP not meeting the analysts' numbers, I try to look at HP's fundamentals: growth of revenue, growth of earnings, margins, roe, debt to equity, etc., as compared to other large cap high tech companies. Meeting or missing the analysts' estimates each quarter only impacts the short term stock action, not the real value of the company. Of course, I'd be happier if they'd crush the numbers, but those dumbass analysts just can't get it right.
Happy investing, Frank |
