Hewlett Packard Enterprises beats forecast in Q1 earnings
By Staff Writer
Mar 04, 2016 10:55 AM EST
Mar 04, 2016 10:55 AM EST
Hewlett Packard Enterprises (HPE) has surpassed forecasts made by analysts for the first quarter earnings. Hewlett Packard Enterprises has reported earnings per share (EPS) of 41 cents a share for first quarter as against the 40 cents per share of average forecast made by analysts. Hewlett Packard Enterprises will close Tsinghua deal may be completed by end of May after getting Chinese regulatory approval.
Hewlett Packard Enterprises has posted $12.72 billion revenues for the first quarter ending January 2016 as against consensus prediction of $12.68 billion revenues by analysts for the quarter. First quarter revenues on constant currency basis rose four percent. However, Q1 revenue fell three percent without considering US dollar currency shift.
CNBC reports that adjusted earnings per share declined seven percent to 44 cents during the first quarter. Hewlett Packard Enterprises forecasts further drop in adjusted earnings per share in the range of 39 cents or 43 cents in the second quarter. The average forecast of Wall Street on adjusted earnings for second quarter was at 42 cents. Hewlett Packard predicts adjusted earnings per share for entire 2016 in the range of $1.85 and $1.95, whereas Thomson Reuters expected $1.87 adjusted earnings per share for entire 2016 year.
Meg Whitman, the company's President and CEO, said in a statement: "During our first quarter as an independent company, we saw the progress that comes from being more focused and nimble."
Whitman further said: "We delivered a third consecutive quarter of year-over-year constant currency revenue growth, and excluding the impact of recent M&A activity, we saw revenue growth in constant currency across every business segment for the first time since 2010."
Responding to a question about Tsinghu deal, which was scheduled to be closed by end of February 2016, during earnings call, Whitman said it could be completed by May. Hewlett Packard is waiting for Chinese regulatory approval for Tsinghua deal.
Enterprise group business contributes over half of the total revenues to HPE. The enterprise group business revenues rose one percent to $7.1 billion for the first quarter. HPE shares rose 6.4 percent to $14.47 on Thursday. Net earnings dropped to $267 million or 15 cents per share for the first quarter from $547 million or 30 cents per share in the previous corresponding quarter, according to Forbes.
China Securities Regulatory Commission has recently fired Xiao Ganga as Chairman and replaced him with Liu Shiyu. This incident has further delaying the approval process for Tsinghua deal.
Yahoo Finance further adds HPE shares fell 10 percent this year so far. Palo Alto, California - based company made a profit of 15 cents per share. The average forecast of nine analysts in a survey carried out by Zacks Investment Research on HPE earnings was 39 cents per share.
Hewlett Packard Enterprises for the first time announced the financial results separately from HP. HP has been divided into HP and Hewlett Packard Enterprises, which sells commercial computer systems, software and technology services. HP sells personal computers and printers.
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