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HPE Enterprise Sales Sluggish in Q4

Hewlett Packard Enterprise saw revenue up 5% year-over-year to $7.8 billion, but it's having trouble gaining traction with enterprise sales, according to earnings reported Tuesday.

Hewlett Packard Enterprise also reported on Tuesday that CEO Meg Whitman is leaving, replaced by current President Antonio Neri, a 22-year HPE veteran. (See HPE CEO Whitman to Leave, Soon After Saying She's 'Not Going Anywhere' )

For the fourth quarter ending Oct. 31, combined net revenue for HPE was $7.8 billion, including $174 million associated with discontinued operations, up 5% year-over-year, and up 11% excluding server sales to Tier 1 service providers and when adjusted for divestitures and currency. Non-GAAP diluted earnings per share were $0.31, above the previously provided outlook of $0.26 to $0.30 per share.

For the fiscal year, HPE reported net revenue of $28.9 billion from continuing operations. Overall revenue was $37.4 billion, including $8.5 billion from continuing operations.

Photo: The original uploader was RMajouji at English Wikipedia (Transferred from en.wikipedia to Commons.) [CC BY 2.5], via Wikimedia Commons
Photo: The original uploader was RMajouji at English Wikipedia (Transferred from en.wikipedia to Commons.) [CC BY 2.5], via Wikimedia Commons


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Net revenue for the year was down 5% annually, but up 1% when adjusted for revenues and currency, and up 6% excluding server sales to Tier 1 service providers and when adjusted for divestitures and currency.

Non-GAAP diluted net earnings per share were $1.41 for the year, beating the previously provided outlook of $1.36 to $1.40 per share.

HPE traded at $13.25 after hours, down 6.16%.

The Enterprise Group's fourth quarter net revenue was $6.9 billion, flat year-over-year and up 1% adjusted for divestitures and currency. Financial service revenue, though much smaller, grew briskly -- $1.01 billion, up 24% year-over-year. Continuing operations was $7.66 billion, up 5% for the quarter in both real dollars and adjusted for divestitures and currency.

For the fiscal year, Enterprise Group net revenue was $26.2 billion, down 6%, while financial services was $3.602 billion, up 14%. Continuing operations was $28.9 billion, down 5% for the year, but up 1% adjusted for divestitures and currency.

HPE provided an outlook of $0.20 to $0.24 non-GAAP diluted net earnings per share for the first quarter of fiscal 2018, and $1.15 to $1.25 for the full year.

Outside of Tier 1 service provider business, HPE's server business is strong, Whitman said on an earnings call Tuesday. The company saw a great deal of revenue from Tier 1, but little profit. Outside of that, servers grew 6%, driven by high-performance computing, and the company's SimpliVity hyperconverged and Synergy composable infrastructure lines. (See HPE Buys SimpliVity for $650M in Hyperconverged Cloud Play and HPE Goes All in With Hybrid IT.)

"With strong top line revenue growth, earnings above our previous outlook and our second consecutive quarter of sequential margin improvement, our fourth quarter results are a reflection of the progress we have made over the past two years to transform HPE into a nimble, focused and innovative organization," Whitman said in a statement.

Next year, HPE plans to change its reporting structure into three parts: Hybrid IT, including servers, storage, data center networking and the Pointnext services and consulting group; Intelligent Edge, which includes wireless LAN, campus and branch switching, edge compute and Aruba services; and financial services.

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— Mitch Wagner Follow me on Twitter Visit my LinkedIn profile Visit my blog Follow me on Facebook Editor, Enterprise Cloud News

danielcawrey 11/24/2017 | 6:10:07 PM
Not Going Anywhere Does this have anything to do with Meg Whitman leaving? I thought she wasn't going anywhere. She forgot to mention she wasn't going anywhere until profits were decimated. 
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