Hewlett Packard CEO Blames Coronavirus Lockdowns For Q2 Results

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Shares of Hewlett Packard Enterprise Co. were falling in after-hours trading on Thursday when the company reported its second quarter financial results.

The stock fell roughly 5% after the company reported results that missed estimates.

For the quarter, HPE reported a loss of $821 million, or 64 cents a share, on revenue of $6.01 billion, down 16% from $7.15 billion a year ago. After adjustments for an $865 million impairment charge and other effects, earnings came in at 22 cents a share, down from adjusted earnings of 42 cents a share a year ago.

Analysts surveyed by FactSet were waiting for adjusted earnings of 30 cents a share on sales of $6.33 billion.

“The global economic lockdowns since February significantly impacted our fiscal Q2 financial performance,” HPE Chief Executive Antonio Neri stated. “We exited Q2 with $1.5 billion in orders across the portfolio, representing two times the average historical backlog.”

“We are taking decisive steps to navigate the near-term uncertainty, while ensuring we align resources to priority growth areas so that we are well positioned to accelerate our edge-to-cloud strategy and address the needs of our customers in a post-COVID-19 world,” Neri added.

He also said on the earnings call, “Our fiscal Q2 results represent a full quarter of operating during the coronavirus-19 crisis. This pandemic is unlike any other crisis we’ve faced, and it has brought significant economic disruption. Businesses and communities are struggling, supply chain productivity continues to be significantly constrained and the demand environment is uneven.”

CFO Tarek Robbiati stated, “Our Q2 results were heavily impacted by the global COVID-19 crisis. As Antonio mentioned, our Q2 represented a full quarter of operating under COVID-19. Our revenues of $6 billion, were down 15% year-over-year, primarily driven by supply chain disruption, which resulted in significantly higher levels of backlog, particularly in Compute, HPC, MCS and Storage. We also saw uneven demand with customers pushing out business activity as they navigated through the current economic crisis and lockdown.”

There was no outlook given for the current quarter or the fiscal year.

Disclaimer: We have no position in Hewlett Packard Enterprise Co. (NYSE: HPE) and have not been compensated for this article.

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