Hewlett Packard Enterprise said the company has hit headwinds since it provided its outlook for 2017, with increased pressure from forex effects, higher prices for commodities and some near-term execution issues. As a result, HPE is reducing its guidance for diluted EPS to USD 0.60-0.70, from its previous one of 0.72-0.82, and its adjusted diluted EPS expectation to USD 1.88-1.98 from 2.0-2.10.
Revenues in HPE’s fiscal first quarter to end January fell 10 percent year-on-year to USD 11.4 billion. After adjusting for divestments and currency effects, organic revenue fell 4 percent. Revenue fell across all divisions, with a fall of 12 percent to USD 6.3 billion at the Enterprise Group, 11 percent lower revenue to USD 4.0 billion at Enterprise Services, and revenues off 8 percent to USD 721 million at Software. Diluted net earnings rose to USD 0.16 from 0.15 per share, above the company’s outlook of USD 0.03-0.07. Adjusted EPS lifted to USD 0.45 from 0.41, at the top end of company guidance. The operating margin improved to 4.1 percent from 3.0 percent, with the adjusted operating margin going higher to 9.2 percent from 8.1 percent.
For its second fiscal quarter, diluted EPS is seen ranging from a loss of USD 0.03 to a gain of 0.01, with adjusted diluted EPS at USD 0.41-0.45.
