Hewlett Packard Enterprise (HPE) topped revenue expectations for the January quarter despite facing heavy discounting in the market. The data center equipment maker reported a 16% year-over-year increase in revenue, reaching $7.85 billion, with adjusted earnings per share of 49 cents.
However, HPE’s guidance for the new quarter and the full fiscal year was weak, causing its shares to slip 19% in extended trading on Thursday. The company expects pricing adjustments to negatively impact top-line growth in the near term.
HPE will trim its headcount by 2,500 employees, or 5%, over the next 18 months as part of a cost-cutting program aimed at achieving $350 million in gross savings by 2027. This move is expected to lead to significant job losses, affecting about half of the workforce.
The company also faced challenges in its proposed acquisition of Juniper Networks, with the U.S. Justice Department filing a lawsuit to block the deal. The court expects a trial to begin in July, and the deal is scheduled to close by October 2025.
HPE’s CEO Antonio Neri acknowledged that the company could have executed better, citing higher-than-normal inventory for artificial intelligence servers due to a shift towards next-generation graphics processing units from Nvidia. Despite this, HPE remains optimistic about its future prospects, with adjusted earnings per share guidance of $1.70-$1.90 for the 2025 fiscal year.
Source: https://www.cnbc.com/2025/03/06/hewlett-packard-enterprise-hpe-q1-earnings-report-2025.html