Although Hewlett Packard Enterprise Co.’s (NYSE: HPE) fiscal first-quarter financial results reported late on Thursday were mixed, the reaction to the results was catastrophic. Much of this seems to be from the outlook and segment performance. At Thursday’s close, the stock was just barely below a high.

The company said that it had $0.45 in earnings per share (EPS) and $11.41 billion in revenue, compared with consensus estimates of $0.44 in EPS and revenue of $12.13 billion. The same period of last year reportedly had EPS of $0.41 and $12.72 billion in revenue.

HPE reported its first-quarter business segment performance as follows:

• Enterprise Group revenue was $6.3 billion, down 12% year over year, down 6% when adjusted for divestitures and currency, with a 12.7% operating margin.
• Enterprise Services revenue was $4.0 billion, down 11% year over year, down 6% when adjusted for divestitures and currency, with a 7.0% operating margin.
• Software revenue was $721 million, down 8% year over year, down 1% when adjusted for divestitures and currency, with a 21.4% operating margin.
• Financial Services revenue was $823 million, up 6% year over year, net portfolio assets were up 2%, and financing volume was down 10%. The business delivered an operating margin of 9.5%.

In terms of guidance for the fiscal 2017 full year, the company expects to see EPS in the range of $1.88 to $1.98, which is lower than the previous $2.00 to $2.10. The consensus estimates call for $2.05 in EPS and $48.89 billion in revenue for the year.

Three significant headwinds have developed since Hewlett Packard Enterprise provided its original fiscal 2017 outlook back in October 2016: increased pressure from foreign exchange movements, higher commodities pricing and some near-term execution issues.

For the fiscal second quarter, the company forecasts EPS in the range of $0.41 to $0.45, compared with the consensus estimates of $0.47 in EPS and $12.08 billion in revenue.

Meg Whitman, president and CEO of Hewlett Packard Enterprise, commented:

I believe HPE remains on the right track. The steps we’re taking to strengthen our portfolio, streamline our organization, and build the right leadership team, are setting us up to win long into the future.

Shares of HPE were trading down about 9.5% at $22.31 early Friday, with a consensus analyst price target of $24.80 and a 52-week trading range of $13.09 to $24.88.

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