Hewlett Enterprise Sees Weak Revenue -- WSJ
04 March 2020 - 7:02PM
Dow Jones News
By Maria Armental
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (March 4, 2020).
Hewlett Packard Enterprise Co. cut its free-cash flow
projections for the year, citing a supply-chain disruption that was
aggravated by the coronavirus epidemic, and said it no longer
expects revenue to increase this year.
HPE had previously projected a return to revenue growth this
year. But that was before the coronavirus, which has disrupted
business around the world. HPE sells servers, data-storage gear and
related services to corporate clients.
On Tuesday, HPE said it no longer expected revenue to grow for
the year that ends in October, as a shortage of components was
exacerbated by the coronavirus outbreak and it faced some
challenges in consolidating a manufacturing site in North
America.
But the company said it expect the issues to be resolved toward
the end of the year and maintained profit targets for the year at
$1.01 to $1.17 a share in profit, or $1.78 to $1.94 on an adjusted
basis.
HPE said it now expects $1.6 billion to $1.8 billion in free
cash flow for the year, down from its earlier view of $1.9 billion
to $2.1 billion.
Revenue for the quarter ended Jan. 31 fell to $6.95 billion from
$7.55 billion a year earlier, a larger decline than expected.
HPE's shares fell 5.8% to $11.86 in after-hours trading on
Tuesday.
The Silicon Valley company, born from the 2015 split of
Hewlett-Packard Co., reported a first-quarter profit of $333
million, or 25 cents a share, compared with $177 million, or 13
cents a share, a year earlier. On an adjusted basis, HPE's profit
rose to 44 cents a share from 42 cents a share a year earlier.
HPE forecast 20 cents to 24 cents a share, or 42 cents to 46
cents a share on an adjusted basis. Analysts surveyed by FactSet
expected 24 cents a share, or 44 cents a share as adjusted, on
$7.21 billion in revenue.
HPE has canceled most of its events through April over
coronavirus concerns but still plans to hold the HPE Discover 2020
conference in Las Vegas in June, it said.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
March 04, 2020 02:47 ET (07:47 GMT)
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