Profit Forecast for HP Enterprise Falls Short on Chip Supply Struggles

The chip supply shortage is affecting many companies including Hewlett Packard Enterprises Co., who this week gave a profit forecast that fell short.

Profit, excluding certain items, will be 42 cents to 50 cents a share in the three months ending in January, said HP on Tuesday. That compares with analysts’ average projection of 49 cents, according to data compiled by Bloomberg.

The tech giant said it was held back by shortages of components that made it difficult to meet demand for its computer equipment.

“Supply continued to be a problem and it will be in the short term,” Chief Executive Officer Antonio Neri said in an interview. “Demand significantly accelerated in the fourth quarter.”
Shares fell as low as $12.88 in extended trading on Tuesday following the report, after closing at $14.35 in New York.

According to Neri however, demand remains robust, boosted by the broader return to offices and in-person study following the Covid-19 lockdowns, and the embrace of new technology those shifts in the economy have created.

In the fourth quarter, revenue for the company rose 2% to $7.35 billion. Profit, excluding some items, was 52 cents a share. Analysts, on average, estimated adjusted earnings of 48 cents a share on revenue of $7.38 billion.

For the quarter ended Oct. 31, the company’s revenue was up 2% from a year ago, or flat adjusted for currency. The number was up 7% sequentially, but slightly below the $7.38 billion that Wall Street expected.

The company’s biggest unit, Compute, saw sales rise 1.1% to $3.2 billion. Storage revenue gained 3.5% to $1.26 billion. The Intelligent Edge unit, which sells devices used to link and manage previously unconnected gear, gained 3.7% to $815 million.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.