HPE stock drops on mixed earnings, guidance miss
Hewlett Packard Enterprise (HPE) shares move lower in Thursday's after-hours trading session after the computer company shared mixed fiscal first-quarter earnings results. HPE missed revenue projections, posting $6.76 billion against estimates of $7.1 billion. The company managed to squeak past adjusted EPS forecasts with gains of $0.48.
Yahoo Finance Live dissects HPE's weaker-than-expected guidance and the company's performance across its segments.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
JULIE HYMAN: Shares of Hewlett Packard Enterprise falling by about 5.5% after the company reported earnings for its first fiscal quarter, and also cut its forecast for the full year, notably. So it looks like that is really one of the big things that is pressuring the sale-- the shares here, I should say. For the full year, HPE now says adjusted earnings per share will be $1.82 to $1.92.
The upper end of that forecast had been $2.02. So bringing down the upper end of the full-year forecast here. The company's second quarter for fiscal second quarter forecast is also below what analysts had been anticipating for both earnings per share and for revenue here, Josh. So, all of that weighing on the shares right now.
JOSH LIPTON: Yeah. And importantly, you know, the stock had not done a whole lot heading into this print. I mean, year-to-date, it was down. Over the past 12 months, it was down. You know, I think it's going be really interesting. Let's see what CEO Antonio Neri has to say about the general just kind of IT spending environment that puts and takes.
Interested to get color on his compute unit. That's hardware like servers, his storage unit also. What does he have to say-- there are those faster-growing divisions of the company, Julie, like intelligent edge. And, of course, you're looking for any updates on that company's big acquisition kind of roadmap to that integration of Juniper that was a $14 billion deal.
JULIE HYMAN: Yeah. Let me just quickly run through those particular units that you just mentioned here. For the first quarter, server revenue fell 23% year-over-year. And intelligent edge, which you mentioned as one of the growth areas, did rise 3% revenue. They're up 3% to $1.2 billion. Hybrid cloud revenue, also $1.2 billion, but it fell by 10%.
And then, finally, financial services revenue, flat year-over-year. Antonio Neri, the CEO, does sound cautious in the statement here, sort of acknowledging the challenges that the company is facing. He does say the company exceeded profitability expectations last quarter, but he said it was a mixed quarter.
But he says, "Despite that, I remain very confident that our focus on customer-centric innovation, our track record of operational discipline will allow us to capitalize on the significant market opportunities and AI, as well as in edge and hybrid," those growth areas here. So, you know, we'll see what that looks like, how that translates. Because right now, it's translating into the stock being down.
JOSH LIPTON: All right. Well, we have some insight coming on those very issues because Yahoo Finance executive editor Brian Sozzi, he is going to be speaking with HPE CEO Antonio Neri. That's tomorrow morning in the 10:00 AM hour.
