Today's HP (NYSE HPQ) earnings announcements is considered by many to be an important bellwether of the economy. While the trend of IT spending may be measured in many ways, even just within the details behind the HPQ numbers, one of the important ones will be the company's printer business, and especially the printing supplies group's revenues, profits and commentary provided by HP management after today's market close. In the Wall Street Journal's Ahead of the Tape column today, Jeff Opdyke writes about expectations, in a piece entitled "Latest Economic Signal: H-P Toner Error" and quotes:
Brian Alexander, an analyst at Raymond James & Associates, estimates sales declines in H-P's consumable business "will accelerate this quarter -- it could be down in the low- to midteens -- and will probably stay negative the rest of the year."
So in other words, the markets will respond to the perception of the economy's fate, which hangs (today at least) on the collective read on HP's second quarter, and HP's quarter will be dramatically affected by its printer business, of which printer supplies play a pivotal part. A bit mindful of the old story about "for the want of a nail, the shoe was lost; for the want of a shoe, the horse was lost; ...". But let's hope that's "saved" not "lost" in this case. Stay tuned-post market!