HPE enterprise sales sluggish in Q4
Net revenue for the year was down 5% annually
Hewlett Packard Enterprise (HPE) saw revenue up 5% year-over-year to $7.8 billion, but it’s having trouble gaining traction with enterprise sales – and its CEO is leaving, reports Enterprise Cloud News (Banking Technology’s sister publication).
For the fourth quarter ending 31 October, 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.
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, CEO Meg Whitman said on an earnings call. 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.
“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 organisation,” Whitman says.
Next year, HPE plans to change its reporting structure into three parts: hybrid IT, including servers, storage, data centre 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.
Exit, stage left
HPE also reported that Whitman is leaving, replaced by current president Antonio Neri, a 22-year HPE veteran. This is less than three months after she said she’s “not going anywhere”.
What’s next for Whitman?
“After a 35-year nonstop career, I am actually going to take a little downtime, but there’s no chance I’m going to a competitor. No chance. I have to say I’ve become quite loyal to Hewlett Packard, and to Hewlett Packard Enterprise, I love this company and I would never go to a competitor,” she says.
So, don’t count out Whitman popping up at one of HPE’s competitors. After all, this is the same woman who said three months ago she’s “not going anywhere” from HPE.
