Hewlett Packard Enterprise (HPE) a strong operating profit for its first quarter to end January, though the net profit per share again suffered a hit from the effects of the US Tax Reform and revenues went slightly lower. The company nevertheless increased its outlook for fiscal full year 2019, saying it now sees diluted EPS at USD 0.88-0.98 and adjusted EPS at USD 1.56-1.66. The company had originally guided for diluted EPS at USD 0.73-0.83 and adjusted EPS at USD 1.51-1.61. The free cash flow guidance is maintained at USD 1.4-1.6 billion. CEO Antonio Neri said the company is confident that its differentiated, software-defined services will continue to grain traction in the future, driving accelerated revenue growth from the second quarter.
Revenues for Q1 were off somewhat to USD 7.6 billion from 7.7 billion the year earlier, while the operating profit doubled to USD 456 million, driven by improved gross margins and cost reductions at HPE Next and the operating margin jumped to 6.0 percent form 3.0 percent. The net profit however dropped over 88 perent to USD 0.2 million and earnings per share fell 86 percent to a lower-than-expected USD 0.13, from 0.92 the year before. Adjusted EPS meanwhile went higher than forecast, rising 31 percent to USD 0.42. Cash flow from operations lifted 169 million to USD 382 while the free cash went to a negative USD 190 million from a positive 222 million.
Looking at the company’s segments, revenues lifted 5 percent to USD 686 million at Intelligent Edge. Under that segment, HPE Aruba Product revenue went up 3 percent, with balanced growth across wired and WLAN. HPE Aruba Services revenue went 20 percent higher. At the Hybrid TV segment, revenues fell 3 percent to USD 6 million, with higher Storage (+3%) unable to offset losses at Compute (-3%) and HPE Pointnext (-6%). At Financial Services, revenues advanced 2 percent.
