No Meg? No problem! Neri finishes up solid first year atop HPE

CEO sees questions in the coming months, however

HPE boss Antonio Neri put the wraps on his first year as CEO with another solid fiscal quarter.

The enterprise computing giant closed out its fiscal 2018 with a total of $31bn in revenues, capped by an $8bn fourth quarter of the year.

For the quarter, ending October 31:

  • Revenues of $7.9bn were up 3.7 per cent from $7.7bn in Q4 2017.
  • A net loss of $800m on the quarter was blamed on a one-time $1.4bn tax hit the company wrote off. Otherwise net earnings would have been around $700m, HPE said.
  • Non-GAAP earnings per share were $0.45, topping estimates of $0.43 by analysts.
  • Hybrid IT revenues were $6.4bn, up 5 per cent from Q4 2017. Hybrid accounts for 79 per cent of all HPE revenues.
  • Intelligent Edge revenues were $814m, up 17 per cent and good for 10 per cent of the total revenue haul.

For the full year:

  • Revenues of $30.9bn were up 7 per cent from $28.9bn last year.
  • Net income of $2bn was up from $400m in 2017.
  • Non-GAAP earnings per share were $1.56, though thanks to the tax hit, HPE's GAAP earnings were just $1.23, well shy of its $1.85 goal.
  • Hybrid IT revenue was $25bn, up 6 per cent year over year.
  • Intelligent Edge revenue was $2.9bn for the year, a 13 per cent improvement.
  • Financial services revenue was $3.7bn, a 2 per cent growth.

"As we close my first fiscal year as CEO, I am incredibly proud of where we stand in the marketplace and of our innovative culture," Neri said in announcing the numbers.

"In 2019, I have great confidence that our experienced global team and proven strategy will accelerate what comes next for our customers from edge to cloud."

At the same time, HPE does have some reason for concern going into the new year. The company noted that revenues in the APAC region were down 5 per cent year over year, and should the US trade war with China escalate with higher tariffs, further problems would arise.

"At 10 per cent it makes no sense to change anything," Neri said of the tariffs on Chinese goods affecting pricing or other business decisions.

"At 25 per cent you have to consider other options."

HPE shares were down 2.33 per cent in after-hours trading at $14.70. ®

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