HPE Shares Fall On Revenue Miss

Shares of the Hewlett Packard Enterprise Company (HPE) were falling on Monday after the company reported revenue that came in below what analysts had been expecting.

The stock saw a roughly 4% drop in after-hours trading upon reporting fourth quarter financial results.

For the quarter, HPE reported earnings of 49 cents a share, excluding certain items. This is compared to the 46 cents a share that was expected by analysts according to Refinitiv.

Revenue at $7.22 billion was below the $7.40 billion expected by analysts, per Refinitiv.

Compared to the quarter a year ago, revenue saw a 9% drop. Sales for the full fiscal year came in at $29.14 billion, down about 42% from three years ago.

The company’s Hybrid IT segment saw an 11% drop in revenue at $5.67 billion for the quarter, trailing the $5.74 billion FactSet consensus estimate.

Looking ahead, HPE is expecting 42 cents to 46 cents in earnings per share, excluding certain items. Analysts polled by Refinitiv were expecting earnings of 42 cents.

For the 2020 fiscal year, the company expects a range of $1.78 to $1.94 in earnings per share, compared to the $1.85 average estimate, according to Refinitiv.

CEO Antonio Neri said on the earnings call, “We have just closed a very successful fiscal year 2019 at HPE marked by strong and consistent performance across the company. We did what we said we would do this year and built on our track record of delivering on our promise, since I became CEO almost two years ago. In fiscal year ’19, we realized the benefits of a more streamlined and focused company and we executed with discipline. We made organic investments and targeted acquisitions to shift our portfolio to higher value, higher margin offerings and we made our culture a priority, which has resulted in an 18 point increase in our employee engagement score over the last three years. This reenergized high performing team is committed to accelerating what is next for customers and partners. Through these efforts, we improved profitability across the business and significantly exceeded our original non-GAAP earnings and free cash flow guidance.”

HPE shares are still up 32% this year.

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