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Struggling personal computer maker Hewlett-Packard Co. (NYSE: HPQ) is on tap to report fiscal Q3 earnings after today's (Wednesday) closing bell.
Wall Street is looking for HP to post fiscal Q3 earnings per share (EPS) of $0.89, up from $0.86 in the same quarter a year ago. HP has said it expects EPS of $0.86 to $0.90.
Revenue is expected to come in at $27.03 billion, modestly lower than the $27.23 billion reported in the year-ago quarter.
The Palo Alto, Calif.-based company continues with ambitious turnaround plans under Chief Executive Officer Meg Whitman. HP has been cutting costs and boosting sales of personal computers (PCs). It has also announced plans to slash headcount by some 16,000 in attempts to remake itself and regain its swagger.
After reigning since 2006, HP lost its coveted title of world's largest PC maker in Q2 2013, when Chinese PC manufacturer Lenovo took the crown.
"We don't like being number two and we don't plan to stay there," Hewlett-Packard said in a statement. "We have a multi OS, multi architecture and multi form factor computing strategy that we believe will delight customers and rebuild share. We're also focused on building a profitable business that's smart about its future."
Here's a look at the different components that make up HP's business – and what investors will be watching for today…
PC Sales Still an Integral Part of Hewlett-Packard's (NYSE: HPQ) Business Strategy
Personal computers contribute nearly 30% of HP's revenue and account for 10% of its estimated value.
Sales in its Personal System group grew 7% in the previous quarter from a year ago. The company also boosted its PC market share, most notably in Europe, the Middle East, and Asia.
Investors will be closely watching for signs of continued momentum in HP's PC segment, along with several other key factors.
Over the last couple years, amid an increasing shift to tablets and souped-up smartphones, PC makers have experienced a sharp drop off in sales. But, PCs sales are starting to pick up again, and PC makers are sounding more upbeat.
While tablets have indeed won places in homes, they aren't replacing computers in the workplace due to their limited capabilities.
"Companies are realizing there's a need for a productivity tool that's different than just a tablet," Whitman said on a conference call after Q2 results.
Furthermore, businesses are starting to replace antiquated computers and software in large part because of Microsoft Corp.'s (Nasdaq: MSFT) decision to phase out support for its outdated Windows XP operating system.
The current rebound in business purchases, however, isn't expected to offset slower consumer PC demand and is projected to only last a few quarters.
Still, any sign of PC sales stability is welcome news to HP after several quarters of slumping PC sales.
While research firm IDC predicts a 6% global shipment PC decline for 2014, Gartner expects the industry to grow again in 2015.
Investors will also want to hear about HP's printing and cloud computing units…