Source: Financial Times
Hewlett Packard Enterprise posted upbeat quarterly results and issued a rosier outlook that topped analyst forecasts, sending shares higher.
HPE — the enterprise technology business that split off from HP Inc’s PCs and printers unit — says its fiscal third quarter net revenue climbed 4% from a year ago to $7.76-billion — or a 1% rise when adjusted for currency effects.
That topped analyst forecasts for $7.68-billion, according to a Thomson Reuters survey.
Revenues in hybrid IT — its largest division, which includes computer systems with storage and networking functions — rose 3% from a year ago to $6.2-billion.
In its so-called Intelligent Edge division, which is developing decentralised “Internet of things” technology that allows data to be processed at the point of collection, revenues were up 10% from a year ago to $785m, while financial services revenues rose 3% to $928-million.
Net income rose to $451-million or 29 cents a share in the three months ended in July, up from $165-million or 10 cents a share in the year ago quarter.
Adjusting for one-time items, earnings of 44 cents a share, handily topped forecasts of 37 cents.
“HPE has delivered a strong Q3 and our results prove we have the right strategy to deliver in the areas of highest value for our customers,” says Antonio Neri, chief executive officer.
“Solid execution across each of our business segments, combined with market momentum, will enable us to deliver FY18 revenue and earnings well beyond our original outlook,” he adds.
The company also lifted its full-year earnings outlook again, to a range of $1.85 to $1.90, up from $1.70 to $1.80 previously.
On an adjusted basis, the company now expects to report earnings of between $1.50 to $1.55 a share, up from $1.40 to $1.50 previously. That also exceeded Wall Street’s projections of $1.46.
For the current quarter, HPE forecast adjusted earnings of between 39 to 44 cents a share.
The Palo Alto-based company also says it appointed Tarek Robbiati as its new finance chief effective September 17. Mr Robbiati, who most recently served as finance chief at Sprint, will succeed Tim Stonesifer, who will remain with the company through the end of October.
HPE shares, which are up nearly 17% year-to-date, climbed 1.4% in extended trade to $16.98.
By Dion Weisler for CNBC
HP now expects 4 500 to 5 000 employees to leave the company by the end of fiscal 2019 as part of an ongoing restructuring plan, the PC maker said on Tuesday.
In October 2016, HP’s board had approved a restructuring plan to be implemented through fiscal year 2019, under which it had expected around 4,000 job cuts. In May, the company said it expected that number to increase by 1 to 2 percent.
The company employed 49,000 people as of October 31.
HP, formed in 2015 when the then Hewlett-Packard Co was spilt into two, said in a regulatory filing. It now expects pretax charges of about $700 million related to the layoffs, compared with about $500 million forecast earlier.
HP estimates that about half of the expected pretax costs will relate to severance and the remaining costs due to infrastructure, non-labor actions, and other charges.
When Hewlett-Packard Co split up, HP Inc focused on the consumer-facing hardware business, including sales of PCs and printers, while Hewlett Packard Enterprise co-hosted the company’s data-center, software and services units.
HP, which has the top position in worldwide PC shipments in the first calendar quarter of 2018 with a 22.6 percent market share, reported better-than-expected quarterly sales of $14 billion in the quarter ended April 30.
HP is set to cut between 3 000 and 4 000 jobs worldwide over the next three years, as it seeks to make savings as PC sales continue to plummet.
The world’s second-largest PC supplier has struggled in a dwindling market, and hopes the cutbacks will save the company between $200-million to $300-million annually by 2020.
However, HP will also incur an estimated $350-million to $500-million in restructuring costs.
According to a filing made to the Security and Exchange Commission on Thursday, HP plans to swing the axe between 2017 and 2019, spread across the many countries and regions the company operates in.
HP split into two divisions in September 2015, resulting in a loss of 30 000 jobs – almost 10% of the workforce. Today HP Inc oversees printers and computers while Hewlett Packard Enterprise focuses on enterprise services, though it has spun off much of its software business.
“I’m proud of the progress we have made in our first year as the new HP. Our focus is clear, our execution is solid, and we are positioned well for the next step in our journey,” says Don Weisler, president and CEO of HP, in a statement.
“We are confident in our strategy and believe it will continue to produce reliable returns and cash flow, while also enabling HP to invest in differentiated innovation and long-term growth.”
Weisler acknowledges that the market is currently “challenging”, but says the company is still “committed to innovating”, pointing to HP’s current opportunities in manufacturing and 3D printing.
The announcement comes during a global decline in PC sales, dropping 5,7% in the third quarter compared to last year according to a report by Gartner. This represents the longest period of decline in the history of the PC industry.
By Dale Walker for www.itpro.co.uk
As part of a broad corporate restructuring plan unveiled ahead of the planned spin-off of its Enterprise Services division next March, Hewlett Packard Enterprise announced the retirement of director of Hewlett Packard Labs Martin Fink, effective at year’s end.
Fink, a 30-year veteran at Hewlett Packard, had served in his current role since last November. Previously, Fink, spent three years as the company’s chief technology officer since November, 2012.
In three decades with the tech giant, Fink worked in a variety of roles at Hewlett Packard, including senior vice president and GM of Business Critical Systems and Converged Application Systems.
Fink, 50, has also served as a director with Santa Clara, Calif. based software company Hortonworks, Inc. since July, 2014.
“Martin has had a remarkable career, driving some of our most important initiatives, including our Cloud, open source and Linux strategies and leading the Business Critical Systems division and The Machine,” Hewlett Packard CEO Meg Whitman wrote in a company memo. “Martin will leave a lasting impression on the company, and I know he will be missed.”
Among other changes, Whitman said the company will consolidate its Product Marketing, E-commerce and Consumer Advocacy divisions into a single marketing organization under the leadership of Henry Gomez, the company’s
Chief Marketing and Communications Officer. In addition, Hewlett Packard Enterprise announced that Chris Hsu, the company’s Chief Operating Officer, will now head its IT and Cyber Security teams.
“By having these teams work more closely with Chris, we will further leverage their capabilities across the company to drive process improvement, enhance customer and partner experience and employee engagement,” Whitman adds.
Shares in Hewlett Packard Enterprise were down 5,29% on the back of the announcement.
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