Slow Restart Following Long Weekend

Let’s talk about old man Hewlett Packard’s two publicly-traded entities and their earnings from after the bell. 🔔

First, we’ll start with HP Inc, which trades under the ticker HPQ. This part of the company comprises three reportable segments: personal systems, printing, and corporate investments. It also retained the company’s original ticker and trading symbol upon the split in 2015. 🖖

It reported second-quarter adjusted earnings per share of $1.07 and revenues of $12.9 billion. That was mixed vs. the consensus estimate for $0.76 per share on $13.07 billion in revenue.

Given the slowdown in the personal computer (PC) market and overall discretionary spending, executives remain focused on cost-cutting efforts. However, like Best Buy and other retailers, they hinted that they expect a rebound in PC sales during the year’s second half and into 2024. 📆

Analysts were encouraged by cost-cutting, increasing bottom-line guidance, and inventory reduction. However, the company did not receive the same artificial intelligence (AI)-fueled boost that others in the market did. Executives tried to spur excitement by saying AI represents a “tremendous refresh opportunity to redefine what PCs can do.”

Clearly, investors remain skeptical about the overall impact AI will have on its business. $HPQ shares traded down about 4% after hours. 🔻

Hewlett Packard Enterprise Co. trades under the ticker symbol HPE and did not fare better. 👎

The global edge-to-edge cloud company reported adjusted earnings per share of $0.52 on revenues of $6.97 billion. That was mixed compared to the $0.49 and $7.3 billion anticipated by analysts. Despite the shortfall, executives focused on the shift towards higher-margin revenue streams like AI (+18% YoY) and its Intelligent Edge segment ($1.3 billion).

Its third-quarter revenue guidance of $6.7 to $7.2 billion was also lighter than the $7.2 billion consensus view. And its earnings per share estimate of $0.44 to $0.48 straddled the $0.46 expected.

$HPE shares traded down about 5% on the news. 📉

Until today, only six U.S.-listed companies had reached a market capitalization of $1 trillion or more at one point in their history. And one abroad, Saudi Aramco. However, the recent hype over artificial intelligence (AI) helped propel retail investor favorite Nvidia onto that list…at least intraday. 🤩

The chart below shows it is joining the ranks of Apple, Microsoft, Google, and Amazon, which are still above $1 trillion. And Tesla and Meta, which briefly surpassed that mark in 2021 but have since fallen from grace. 👇

Where it goes from here is anyone’s guess. And believe us, people are guessing… But for now, we’re just stopping to smell the roses at this milestone. 🌹

Time will tell what’s (or who) is next. Berkshire Hathaway is closest at $705 billion, followed by TSMC at $530 billion, Visa at $465 billion, United Health at $447 billion, and Exxon Mobil at $421 billion. The race is on… 👀

It’s time to talk storage, both the physical and cloud type, as we recap earnings from the space. 📝

First, we’ll start with cloud storage company Box, which beat Wall Street’s expectations. Its first-quarter adjusted earnings per share of $0.32 on revenue of $251.9 million topped the $0.27 and $250 million anticipated. Billings, which reflects business under contract but not realized, also beat at $191.1 million vs. the $180 million estimate.

Executives focused on their profitable growth strategy, which includes existing improvements to the Box Content Cloud platform and future innovation with Box AI. In addition, they harped on their free cash flow growth of 19% YoY and reiterated their fiscal year 2024 target of revenue growth plus a free cash flow margin of 35%. 🎯

Along with that, they increased their full-year earnings estimate to $1.44-$1.50 per share from $1.42 to $1.45. However, their revenue range fell slightly from $1.05-$1.06 billion to $1.045 to $1.055 billion.

$BOX shares were up 3% after hours as they continued to claw back their post-earnings decline from March. ⛅

Moving to physical storage (no pun intended), U-Haul Holding Company also reported today. 📦

The company reported net earnings available to shareholders of $37.7 million, down from $86.7 million a year earlier. 🔻

Self-moving equipment rental revenues fell 6% YoY to $32.5 million, with revenue and average miles driven per transaction falling. Those declines were more prominent in one-way markets. Meanwhile, self-storage revenues rose 17% YoY to $28.4 million. Occupancy for all locations declined by 1.4% to 81.2%, with the company adding 6 million net rentable square feet (+12% YoY).

Fleet maintenance and repair costs rose $32.4 million YoY. Higher activity levels in prior years combined with a slower replacement of new equipment into its fleet caused the increase. 🛠️

Executives say that overall moving activity has returned to more historical trends. Self-storage has cooled over the last two years, but the company is still building and filling new units. Overall, the company is focused on building its long-term competitive position.

$UHAL shares fell 3% after hours as investors consider whether the company can weather a slowdown as well as executives hope it will. 🤔