Hewlett Packard Enterprise (HPE) has revealed its financial results for its fiscal 2017 first quarter, ending January 31, with the company reporting a first quarter net revenue of $US11.4 billion.
This represents a loss of 10 per cent from the $US12.7 billion it recorded in the prior-year period.
The company said, in a statement, that this is down to four per cent when adjusted for divestitures and currency.
This was a result of an increase in cash flow from operations, with the company recording $US1.5 billion in Q1 FY17 as compared to the $US100 million recorded in Q1 FY16.
It said its first quarter Generally Accepted Accounting Principles (GAAP) diluted net earnings per share (EPS) was $US0.16, up from $US0.15 in the prior-year period, and above its previously provided outlook of $US0.03 to $US0.07.
First quarter non-GAAP diluted net EPS was $US0.45, up from $US0.41 in the prior-year period, and near the high end of its previously provided outlook of $US0.42 to $US0.46.
It said its first quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $US505 million and $US0.29 per diluted share respectively.
It added that it is related to separation costs, restructuring charges, amortisation of intangible assets, acquisition and other related charges, an adjustment to earnings from equity interests, defined benefit plan settlement and remeasurement charges and tax indemnification adjustments.
Excluding its financial services business, all of the company’s segments faced losses for the first quarter.
Its enterprise group revenue was $US6.3 billion, down 12 per cent YoY, with servers revenue down 12 per cent, storage revenue was down 13 per cent, networking revenue down 33 per cent, and technology services revenue down two per cent.
Its enterprise Services revenue was $US4 billion, down 11 per cent YoY, with its infrastructure technology outsourcing revenue down eight per cent, and application and business services revenue down 17 per cent.
The company mentioned that its software revenue was $US721 million, down eight per cent YoY, recording losses in its license revenue of nine per cent, losses in its support revenue of nine per cent, and a dip in professional services revenue of seven per cent. However, its Software-as-a-service (SaaS) revenue was up four per cent.
Its financial Services business revenue was $823 million, up six per cent YoY, with net portfolio assets up two per cent, and financing volume down 10 per cent. The business delivered an operating margin of 9.5 per cent.
"I believe HPE remains on the right track," Hewlett Packard Enterprise president and CEO, Meg Whitman, said. "The steps we're taking to strengthen our portfolio, streamline our organisation, and build the right leadership team, are setting us up to win long into the future."
In the statement, the company indicated that “three significant headwinds have developed” since HPE provided its original fiscal 2017 outlook in October 2016: increased pressure from foreign exchange movements, higher commodities pricing, and some near-term execution issues.
“Given these challenges, the company is reducing its FY17 outlook by $US0.12 in order to continue making the appropriate investments to secure the long-term success of the business,” it added.
For the fiscal 2017 second quarter, HPE said it estimates GAAP diluted net EPS to be in the range of a loss of $US0.03 to $US0.01 profit and non-GAAP diluted net EPS to be in the range of $US0.41 to $US0.45.
Fiscal 2017 second quarter non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $US0.44 per diluted share, related primarily to separation costs, restructuring charges and the amortisation of intangible assets.
For its 2017 fiscal year, it estimates GAAP diluted net EPS to be in the range of $US0.60 to $US0.70 and non-GAAP diluted net EPS to be in the range of $US1.88 to $US1.98.
Fiscal 2017 non-GAAP diluted net EPS estimates exclude after-tax costs of about $US1.28 per diluted share, related primarily to separation costs, restructuring charges and the amortisation of intangible assets.
Since the start of 2017, the company has been on an acquisition spree, acquiring security startup, Niara, to boost its ClearPass portfolio; Californian cloud consumption analytics software provider, Cloud Cruiser ; and hyper-converged infrastructure provider, SimpliVity, for $US650 million.
The company will also be launching a new post-merger brand of CSC and HPE Enterprise Services on 3 April, named DXC Technology. The combined CSC / HPE business has handed local post-merger leadership to Seelan Nayagam.
In September 2016, the company also spun off and merged what it considered its non-core software assets with U.K.-based enterprise software firm, Micro Focus, in a deal worth $US8.8 billion.
Locally, HPE Australia reshuffled its management pack in October 2016, resulting in the departure of senior server and storage leaders. Tony Smith vacated his role as director of HPE Server Business Unit on October 31, with Paul Shaw departing as general manager of Storage A/NZ and joining Hitachi Data Systems (HDS) as its A/NZ northern region sales director.
Replacing Smith and Shaw was Raj Thakur, who returned to the HPE South Pacific business in a newly created position from November 1.
HPE Australia has also been involved in an Australian Taxation Office (ATO) systems outage, launching an internal investigation into the cause of the hardware failure behind the unprecedented outage which hit the ATO on 12 December last year.
HPE Australia technicians were burning the midnight oil with ATO staff in a bid to help the agency complete a major replacement of its failed hardware. It is understood that the outage involved two new HPE 3Par storage area network (SAN) units acquired by the ATO in 2015.
