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% from the $US12.7 billion it recorded in the prior-year period.
The company said, in a statement, that this is down to 4% 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, amortization 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% YoY, with servers revenue down 12%, storage revenue was down 13%, networking revenue down 33%, and technology services revenue down 2%.
Its enterprise Services revenue was $US4 billion, down 11% YoY, with its infrastructure technology outsourcing revenue down 8%, and application and business services revenue down 17%.
The company mentioned that its software revenue was $US721 million, down 8% YoY, recording losses in its license revenue of 9%, losses in its support revenue of 9%, and a dip in professional services revenue of 7%. However, its Software-as-a-service (SaaS) revenue was up 4%.
Its financial Services business revenue was $823 million, up 6% YoY, with net portfolio assets up 2%, and financing volume down 10%. The business delivered an operating margin of 9.5%.
"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 amortization 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 UK-based enterprise software firm, Micro Focus, in a deal worth $US8.8 billion.