HPE Stock Dives As HPE Earnings, Guidance Miss Estimates

Hewlett Packard Enterprise (HPE) on Wednesday reported fiscal second-quarter earnings and revenue that missed Wall Street targets. The company’s July-quarter outlook for HPE stock also came in below expectations amid supply-chain issues and the impact of Russia-related operations.

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HPE earnings for the April quarter were 44 cents a share, down 4% from a year earlier. Revenue rose a fraction to $6.7 billion, the company said. Analysts expected HPE earnings of 45 cents on sales of $6.81 billion for the period ended April 30.

A year earlier, HPE earnings were 46 cents a share on sales of $6.7 billion.

For the quarter ending in July, the rival of Cisco Systems (CSCO) and Dell Technologies (DELL) predicts earnings of 49 cents at the midpoint of its outlook versus estimates of 51 cents.

HPE Stock: Gross Margin Pressure

The maker of computer servers, networking equipment and data storage gear reported earnings after the market close. HPE stock tumbled 7.8% to 14.55 in extended trading on the stock market today.

As with Cisco, HPE stock has been dealing with gross margin pressure from higher logistical costs and component pricing.

“We are particularly pleased with the resiliency of our gross margins despite the inflationary environment and ongoing supply chain disruptions,” Chief Financial Officer Tarek Robbiati said in the earnings release. “With record levels of high-quality backlog, we are well positioned for growth in 2022 and beyond.”

Heading into the HPE earnings report, the tech stock owned a Relative Strength Rating of 83 out of a best-possible 99, according to IBD Stock Checkup.

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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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