Hewlett Packard Enterprise (NYSE:HPE) shares slid early Friday as the data center equipment maker issued quarterly and full-year guidance that came in below consensus.
Earnings per share were reported to be 49 cents adjusted vs. 49 cents expected, on revenue of $7.85 billion vs. $7.82 billion expected
HPE’s revenue rose 16% year over year in the quarter ending on Jan. 31, according to a statement. The company was left with profit of $598 million, or 44 cents per share, up from $387 million, or 29 cents per share, in the same quarter a year earlier. The adjusted earnings per share excludes stock-based compensation.
“We could have executed better,” CEO Antonio Neri said on a conference call with analysts. The company had higher than normal inventory for artificial intelligence servers because of a shift to next-generation Blackwell graphics processing units from Nvidia (NASDAQ:NVDA).
The backlog for AI systems rose 29% quarter over quarter to $3.1 billion. Total server revenue totaled $4.29 billion.
The company said it would implement a cost-cutting program involving layoffs over the next 18 months that will lead to $350 million in gross savings by the 2027 fiscal year. Around 2,500 employees will be affected, a spokesperson said, representing about 5% of the workforce when also factoring in expected attrition. At the end of October, HPE employed 61,000 people, according to its most recent annual report.
HPE stock faded $2.70, or 15.1%, to $15.26.
