Hewlett-Packard will release its quarterly report on Tuesday, and investors have been increasingly nervous about the tech giant's ability to keep its long-term restructuring efforts moving forward. With rival IBM having faced tough conditions in the IT market and with Accenture squarely aimed at the same consulting customers that HP hopes to poach in its reorganization efforts, Hewlett-Packard faces pressure to start producing solid results from its strategic moves sooner rather than later.

The rise in Hewlett-Packard's shares has been particularly surprising because it indicates that Wall Street has been willing to give CEO Meg Whitman the benefit of the doubt in her long-range plans. Rather than punishing HP shares for the sluggishness of the company's rebound, investors have patiently waited for growth to emerge. But how much longer will they be willing to wait? Let's take an early look at what's been happening with Hewlett-Packard over the past quarter and what we're likely to see in its report.

Stats on Hewlett-Packard

Analyst EPS Estimate

$1.00

Change From Year-Ago EPS

(13.8%)

Revenue Estimate

$27.91 billion

Change From Year-Ago Revenue

(6.8%)

Earnings Beats in Past 4 Quarters

3


Source: Yahoo! Finance.

What's in store for Hewlett-Packard earnings this quarter?
In recent months, analysts have stayed largely stable in their calls on Hewlett-Packard earnings, cutting current-year estimates by a penny per share but boosting next year's earnings projections by the same amount. The stock has moved up 14% since late August.

The rebound came after troubling results for Hewlett-Packard in its July quarter, with the company seeing its shares drop 12.5% after HP issued its report. Earnings met expectations, but even a small revenue miss was enough to spook investors about the pace of the turnaround. Whitman's assurances that the company's recovery remains on track didn't make shareholders any happier about the 8% drop in year-over-year revenue that HP suffered, even though the CEO has been smart in keeping HP from resorting to price cuts to drive sales.

Still, the entire industry continues to face struggles. IBM reported a substantial drop in revenue of its own, with hardware sales particularly weighing on the tech giant's results. Services and software sales were up slightly, though, validating the approach that both IBM and HP have taken in moving away from their respective hardware-based strengths over the years. Yet IBM arguably has even greater prospects for future success, given its emphasis on the highly popular data-analytics area and its better-developed presence in the IT consulting realm. Accenture has also seen difficulty in its consulting businesses, with only modest gains in overall revenue failing to meet investors' expectations.

HP keeps trying to make inroads in certain niches. Its deal with Cerner in late August gives HP an entry into the big-data business of hospitals and health care, helping it go up against Accenture and IBM in a high-growth area. Yet Accenture recently boosted its own exposure to health-care IT by buying out ASM Research, and IBM has a long history of health-related technology with its Watson artificial-intelligence medical assistant.

One interesting move involves HP's decision to get involved in 3-D printing. The company said that it will enter the space as early as next year, making HP a huge fish in the heretofore small pond of relatively tiny upstart players in the 3-D printing industry. Given HP's expertise in printing, the move makes intuitive sense, but it's unclear whether HP can actually make big profits from 3-D printing or rather will simply accelerate the process of the industry becoming a commodity business like its other hardware efforts before it.

In the HP earnings report, watch to see whether the company stays on track with its overall reorganization plans. Investors have been patient until now, but they might not stay so if the tech giant doesn't start delivering on its promises soon.

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The article Hewlett-Packard Has to Outpace IBM and Accenture originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends and owns shares of IBM. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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