Hewlett Packard Enterprise Co (NYSE:HPE, ETR:2HP) has slashed its sales and profit guidance for the full year on lower demand for its network solutions products and a lack of chip supply.
It sees revenue for the year ending in October being flat to 2% higher, down from its prior guidance of 2% to 4% growth.
It forecast adjusted earnings per share (EPS) of $1.82 to $1.92, compared to its earlier expectation of $1.82 to $2.02.
Wall Street analysts were expecting revenue to increase by 1.4% to $29.55 billion and adjusted EPS of $1.92, at the high end of HPE’s guidance range.
Meanwhile, HPE reported mixed results for the first quarter. For the quarter ended January 31, 2024, revenue decreased 14% year-over-year to $6.8 billion, short of estimates of $7.1 billion.
But adjusted EPS was at the high end of HPE’s guidance range of $0.42 to $0.50 at $0.48, above the consensus estimate of $0.45. This represented a 24% decline over the year-ago quarter.
"HPE exceeded our profitability expectations and drove near-record year-over-year growth in our recurring revenue in the face of market headwinds, demonstrating the relevance of our strategy," HPE CEO Antonio Neri said in a statement.
"Despite a mixed quarter, I remain very confident that our focus on customer-centric innovation and our track record of operational discipline will allow us to capitalize on the significant market opportunities in AI as well as across edge and hybrid cloud and to deliver value to our shareholders."
HPE shares initially about 5% in extended trading following the release of its results but bounced back in the early afternoon on Friday to trade 1.1% higher at $15.40.