Hewlett Packard Enterprise Co. reported flat results from a year ago Wednesday amid doubts about the environment for business spending on tech hardware, and shares dove in late trading.
reported second-quarter net earnings of $250 million, or 19 cents a share, compared with net earnings of $259 million, or 19 cents a share, in the same quarter a year ago. EPS was flat, HPE said, because of a $126 million charge related to suspended business operations in Russia. HPE said adjusted earnings were 44 cents a share, down 4% from the year-ago quarter.
HPE’s revenue of $6.71 billion was a tad higher than the $6.7 billion reported a year ago. Analysts polled by FactSet expected adjusted earnings of 45 cents a share on revenue of $6.8 billion.
“We are particularly pleased with the resiliency of our gross margins (34%) despite the inflationary environment and ongoing supply chain disruptions,” HPE Chief Financial Officer Tarek Robbiati said in a statement.
HPE shares fell more than 6% in after-hours trading immediately following the release of the results. The stock has dipped 1% in 2022, as the S&P 500 index
has declined 14%.
HPE has faced doubts since Cisco Systems Inc.
provided a disappointing forecast last month, which has sparked fears of businesses cutting some technology spending. B. of A. Securities downgraded the stock in the wake of that report, along with Pure Storage Inc.
which was also expected to report earnings Wednesday afternoon.
Sales from compute ($3 billion, flat from a year ago) and storage ($1.1 billion, down 3%) were the money leaders. Intelligent Edge revenue was $867 million, an increase of 8% from the same quarter a year ago.
HPE offered third-quarter adjusted earnings guidance of between 44 cents and 54 cents a share — roughly within FactSet analysts’ average forecast for 51 cents a share.