HP Enterprise Cuts Outlook, Sees 'Significant Headwinds'
Shares in Hewlett Packard Enterprise Co. tumbled in after-market trading Thursday after the company said it is facing "significant headwinds" that will slow its profits this year.
The information technology products and services provider trimmed its profit outlook for its current fiscal year, citing the impact of foreign currency fluctuations, more expensive commodities and "some near-term execution issues."
It also reported that its revenue in its latest quarter fell 10 percent, coming in short of Wall Street's expectations. The Palo Alto, California-based company's stock fell $1.41, or 5.7 percent, to $24.66 in extended trading.
HPE said it now expects its adjusted profit to be between $1.88 and $1.98 a share for its current fiscal year, down from a previous forecast of between $2 and $2.10 a share. Analysts had been expecting $2.03 a share, according to FactSet.
For the current quarter, HPE now expects to earn between 41 and 45 cents a share on an adjusted basis. Wall Street had been looking for 46 cents a share.
HPE on Thursday reported a fiscal first-quarter profit of $267 million, or 16 cents a share. A year ago it earned $267 million, or 15 cents a share.
Earnings, adjusted for one-time gains and costs, were 45 cents per share, which surpassed Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 44 cents per share.
It posted revenue of $11.41 billion in the period, down from $12.72 billion a year ago and short of Street forecasts. Six analysts surveyed by Zacks expected $12.13 billion.
Hewlett-Packard Co. split into two companies in 2015, with Hewlett Packard Enterprise selling commercial tech products and services, while HP Inc. focuses on personal computers and printers.
HPE has since taken steps to further focus on selling -center hardware and other commercial tech gear to other big organizations. Last year, it announced it was spinning off a big chunk of its business software line-up in an $8.8 billion deal with Micro Focus International PLC. That came a few months after the announced sale of its business-services division to rival Computer Sciences Corp. for $8.5 billion.
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