HPE Loses Over $ 800 Million Due To Lower Sales, CEO Blames Coronavirus “Economic Block”
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Hewlett Packard Enterprise Co. shares fell 5% in after-hours trading on Thursday after the computer giant announced second quarter financial results below Wall Street estimates.
HPE
HPE,
reported a loss of $ 821 million, or 64 cents a share, in revenues of $ 6.01 billion, down 16% from $ 7.15 billion a year ago. After adjusting for $ 865 million in impairment and other effects, the company reported earnings per share of 22 cents, down from adjusted earnings of 42 cents per year a year ago.
The company, which pointed out that supply chain constraints were part of the problem, did not offer financial advice for the current quarter or year.
Analysts polled by FactSet forecast adjusted earnings of 30 cents per share on sales of $ 6.33 billion.
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“Global economic freezes since February had a significant impact on our financial performance in the second quarter,” said HPE CEO Antonio Neri in a statement announcing the results. “We left the second quarter with $ 1.5 billion in orders across the portfolio, which is double the average for the historic portfolio.”
“We are taking decisive action to overcome short-term uncertainty, while ensuring that resources are aligned with priority growth areas to position us to accelerate our edge to the cloud strategy and meet the needs of our customers in a post-COVID world -19, “said Neri.
CFO Tarek Robbiati called the economic climate “very difficult” and told MarketWatch that the company is considering cost reductions that could include layoffs, licenses and hiring restrictions for “adequate size” operations .
Other measures taken by HPE include 25% salary cuts for Neri and the executive vice-presidents until 2020, as well as “workforce changes” aimed at cutting future costs by $ 1 billion.
HPE stocks fell 34.7% this year, while the S&P 500 index
SPX
it was down 8.7%.