Hewlett Packard Enterprise CEO Pleased With Results, but Were Investors?

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When Hewlett Packard Enterprise Co. (NYSE: HPE) reported its fiscal fourth-quarter results on Tuesday after the markets closed, the company said that it had $0.45 in earnings per share (EPS) and $7.95 billion in revenue. That compares with consensus estimates of $0.43 in EPS and $7.84 billion in revenue, as we as the $0.31 per share and $7.66 billion posted in the same period of last year.

Looking ahead to the fiscal first quarter and full fiscal 2019, HPE expects to see EPS in the range of $0.33 to $0.37 and $1.51 to $1.61, respectively. Consensus estimates call for $0.35 in EPS and $7.68 billion in revenue for the quarter, and $1.53 in EPS and $30.73 billion in revenue for the year.

In terms of its segments, for this past quarter the company reported as follows:

  • Intelligent Edge revenue was $814 million, up 17% year over year and up 15% when adjusted for currency, with 10.1% operating margin. HPE Aruba Product revenue was up 17%, up 15% when adjusted for currency, and HPE Aruba Services revenue was up 16%, up 16% when adjusted for currency.
  • Hybrid IT revenue was $6.4 billion, up 5% year over year and up 4% when adjusted for currency, with 11.9% operating margin. Compute revenue was up 9%, up 7% when adjusted for currency, Storage revenue was up 6%, up 4% when adjusted for currency, DC Networking revenue was up 2%, down 1% when adjusted for currency, and HPE Pointnext revenue was down 3%, down 3% when adjusted for currency.
  • Financial Services revenue was $939 million, down 7% year over year and down 5% when adjusted for currency, net portfolio assets were flat year over year, and financing volume was up 8% year over year. The business delivered an operating margin of 7.8%.

Antonio Neri, president and CEO of HPE, commented:

Hewlett Packard Enterprise delivered another impressive quarter in Q4, concluding a very successful fiscal year 2018 marked by significant transformation and achievement. We excelled in delivering differentiated new capabilities for our customers that drove meaningful top line growth while expanding margins that fueled strong cash flow and shareholder returns. As we close my first fiscal year as CEO, I am incredibly proud of where we stand in the marketplace and of our innovative culture. In 2019, I have great confidence that our experienced global team and proven strategy will accelerate what comes next for our customers from edge to cloud.

The stock closed Tuesday at $15.50 a share, in a 52-week range of $13.99 to $19.48. The consensus analyst price target is $18.42. Following the announcement, the stock was down about 3% in the after-hours session on Tuesday.