Meg Whitman at NYSE

HPE’s global first quarter net revenue dips $1.3bn year-on-year

Trade
Meg Whitman stands outside the New York Stock Exchange the day after HPE was spun out as a separate company. Image: IDGNS

24 February 2017

Hewlett Packard Enterprise (HPE) has revealed its financial results for its fiscal 2017 first quarter, ending 31 January, with the company reporting a first quarter net revenue of $11.4 billion.

This represents a loss of 10% from the $12.7 billion it recorded in the prior-year period.

The company said, in a statement, that this is down to 4% when adjusted for divestitures and currency.

This was a result of an increase in cash flow from operations, with the company recording $1.5 billion in Q1 2017 as compared to the $100 million recorded in the same quarter in 2016.

It said its first quarter Generally Accepted Accounting Principles (GAAP) diluted net earnings per share (EPS) was $0.16, up from $0.15 in the prior-year period, and above its previously provided outlook of $0.03 to $0.07.

First quarter non-GAAP diluted net EPS was $0.45, up from $0.41 in the prior-year period, and near the high end of its previously provided outlook of $0.42 to $0.46.

It said its first quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $505 million and $0.29 per diluted share respectively.

It added that it is related to separation costs, restructuring charges, amortisation of intangible assets, acquisition and other related charges, an adjustment to earnings from equity interests, defined benefit plan settlement and remeasurement charges and tax indemnification adjustments.

Excluding its financial services business, all of the company’s segments faced losses for the first quarter.

Its enterprise group revenue was $6.3 billion, down 12% year-on-year, with servers revenue down 12 per cent, storage revenue was down 13%, networking revenue down 33%, and technology services revenue down 2%.

Its enterprise Services revenue was $4 billion, down 11% year-on-year with its infrastructure technology outsourcing revenue down 8%, and application and business services revenue down 17%.

The company mentioned that its software revenue was $721 million, down 8% year-on-year, recording losses in its license revenue of 9%, losses in its support revenue of 9%, and a dip in professional services revenue of seven per cent. However, its software-as-a-service (SaaS) revenue was up 4%.

Its financial services business revenue was $823 million, up 6% year-on-year, with net portfolio assets up 2%, and financing volume down 10%. The business delivered an operating margin of 9.5%.

“I believe HPE remains on the right track,” Hewlett Packard Enterprise president and CEO, Meg Whitman (pictured), said. “The steps we’re taking to strengthen our portfolio, streamline our organisation, and build the right leadership team, are setting us up to win long into the future.”

In the statement, the company indicated that “three significant headwinds have developed” since HPE provided its original fiscal 2017 outlook in October 2016: increased pressure from foreign exchange movements, higher commodities pricing, and some near-term execution issues.

IDG News Service

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