HPE Delivers Q1 Results & Raises FY19 EPS Outlook
Q1 2019 Financial Highlights:
- Revenue: $7.6 billion in line with guidance
-
Operating Profit: GAAP $456 million, up 100% from the
prior-year period; non-GAAP $669 million, up 19% from the prior-year
period driven by improved gross margins and cost reductions from HPE
Next -
Earnings Per Share: GAAP $0.13, down 86% from the prior-year
period EPS from continuing operations due primarily to one-time,
non-cash adjustments related to U.S. tax reform; non-GAAP $0.42, up
31% from the prior-year period and above the previously provided
outlook of $0.33 to $0.37 per share -
Cash Flow from Operations: $382 million, up 169% from $142
million in the prior-year period -
Free Cash Flow: ($190) million, up $222 million from the
prior-year period
FY 2019 Outlook:
-
Earnings Per Share: Raising GAAP diluted net earnings per share
outlook to $0.88 to $0.98 and non-GAAP diluted net earnings per share
outlook to $1.56 to $1.66 -
Free Cash Flow: Reiterating free cash flow guidance of $1.4 to
$1.6 billion
SAN JOSE, Calif.–(BUSINESS WIRE)–Hewlett Packard Enterprise (NYSE: HPE) today announced financial results
for its fiscal 2019 first quarter, ended January 31, 2019.
“Today we reported another strong quarter for Hewlett Packard Enterprise
as we continue to execute against our strategy of growing in the
Intelligent Edge and delivering profitable growth in Hybrid IT,” said
Antonio Neri, President and CEO of HPE. “We significantly expanded both
gross and operating margins and drove 31% growth in non-GAAP earnings
per share. Looking forward, we are confident that HPE’s differentiated,
software-defined solutions will continue to gain traction with customers
looking to harness the explosion of data, driving accelerated revenue
growth starting in Q2.”
First Quarter Fiscal Year 2019
|
HPE fiscal 2019 first quarter continuing operations financial |
|||||||||
| Q1 FY19 | Q1 FY18 | Y/Y | |||||||
| GAAP net revenue ($B) | $7.6 | $7.7 | (1.6%) | ||||||
| GAAP operating margin | 6.0% | 3.0% | 3.0 pts. | ||||||
| GAAP net earnings ($B) | $0.2 | $1.5 | (88.1%) | ||||||
| GAAP diluted net earnings per share | $0.13 | $0.92 | (85.9%) | ||||||
| Non-GAAP operating margin | 8.9% | 7.3% | 1.6 pts. | ||||||
| Non-GAAP net earnings ($B) | $0.6 | $0.5 | 13.5% | ||||||
| Non-GAAP diluted net earnings per share | $0.42 | $0.32 | 31.3% | ||||||
| Cash flow from operations ($M) | $382 | $142 | 169% | ||||||
Information about HPE’s use of non-GAAP financial information is
provided under “Use of non-GAAP financial information” below.
Financial Summary
First quarter net revenue of $7.6 billion, in-line with guidance,
down 2% from the prior-year period, and down 1% when adjusted for
currency. First quarter net revenue was up 1% from the prior-year
period, excluding Tier-1 server sales.
First quarter GAAP operating profit of $456 million, up 100% from
the prior-year period.
First quarter non-GAAP operating profit of $669 million, up 19%
from the prior-year period driven by 280 bps of gross margin expansion
and cost reductions from HPE Next.
First quarter GAAP diluted net earnings per share (“EPS”) from
continuing operations was $0.13, down from GAAP diluted net EPS from
continuing operations of $0.92 in the prior-year period primarily due to
one-time, non-cash adjustments related to U.S. tax reform.
First quarter non-GAAP diluted net EPS from continuing operations
was $0.42, up from non-GAAP diluted net EPS from continuing operations
of $0.32 in the prior-year period. First quarter non-GAAP net earnings
from continuing operations and non-GAAP diluted net EPS from continuing
operations exclude after-tax adjustments of $413 million and $0.29 per
diluted share, respectively, primarily related to the impact of U.S. tax
reform, tax indemnification adjustments, transformation costs,
amortization of intangible assets, acquisition, disposition and other
related charges and an adjustment to earnings from equity interests.
First quarter cash flow from operations of $382 million and free
cash flow of ($190) million, was up $240 million and $222 million
from the prior-year period, respectively.
Segment Results
HPE delivered strong performance in the key areas of the portfolio.
-
Intelligent Edge delivered robust growth in this strategically
important segment. Revenue was $686 million, up 5% year over year,
with 1.3% operating margin. HPE Aruba Product revenue was up 3% with
balanced growth across wired and WLAN. HPE Aruba Services revenue was
up 20%. -
Hybrid IT continued to drive profit growth with revenue of $6.0
billion, down 3% year over year with 11.3% operating margin that was
up 200 bps year over year. Compute revenue was down 3%. Excluding the
impact from the company’s intentional exit of certain Tier-1 customer
segments, Compute revenue grew 3% and HPE’s high-margin Value Compute
portfolio grew approximately 20% driven by strength in
high-performance compute, hyper-converged and composable. Storage
revenue was up 3%, with particular strength in All-Flash Arrays, which
grew 20%. HPE Pointnext revenue was down 6%, primarily due to the
company’s intentional exit of certain geographies, and a strong book
to bill of 110% indicates a strong pipeline of recurring revenue and
profits. -
Financial Services revenue was $919 million, up 3% year over
year and up 6% when adjusted for currency, net portfolio assets were
down 2% year over year and up 2% when adjusted for currency, and
financing volume was down 3% year over year and flat when adjusted for
currency. The business delivered an operating margin of 8.4%.
Raised FY 2019 Outlook
For the fiscal 2019 second quarter, Hewlett Packard Enterprise estimates
GAAP diluted net EPS to be in the range of $0.19 to $0.23 and non-GAAP
diluted net EPS to be in the range of $0.34 to $0.38. Fiscal 2019 second
quarter non-GAAP diluted net EPS estimates exclude after-tax costs of
approximately $0.15 per diluted share, primarily related to
transformation costs and the amortization of intangible assets.
For fiscal 2019 full-year, Hewlett Packard Enterprise now estimates GAAP
diluted net EPS to be in the range of $0.88 to $0.98 and the non-GAAP
diluted net EPS to be in the range of $1.56 to $1.66. Fiscal 2019
non-GAAP diluted net EPS estimates exclude after-tax costs of
approximately $0.68 per diluted share, primarily related to
transformation costs, the amortization of intangible assets, and an
adjustment to earnings from equity interests.
For fiscal 2019 full-year, Hewlett Packard Enterprise reiterates free
cash flow guidance range of $1.4 to $1.6 billion, up over 35% from the
prior year.
About Hewlett Packard Enterprise
Hewlett Packard Enterprise is a global technology leader focused on
developing intelligent solutions that allow customers to capture,
analyze and act upon data seamlessly from edge to cloud. HPE enables
customers to accelerate business outcomes by driving new business
models, creating new customer and employee experiences, and increasing
operational efficiency today and into the future.
Use of non-GAAP financial information
To supplement Hewlett Packard Enterprise’s condensed consolidated
financial statement information presented on a generally accepted
accounting principles (GAAP) basis, Hewlett Packard Enterprise provides
revenue on a constant currency basis as well as non-GAAP operating
expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP
income tax rate, non-GAAP net earnings from continuing operations,
non-GAAP net earnings from discontinued operations, non-GAAP diluted net
earnings per share from continuing operations, non-GAAP diluted net
earnings per share from discontinued operations, gross cash, free cash
flow, net capital expenditures, net debt, net cash, operating company
net debt and operating company net cash financial measures. Hewlett
Packard Enterprise also provides forecasts of non-GAAP diluted net
earnings per share and free cash flow. A reconciliation of adjustments
to GAAP financial measures for this quarter and prior periods is
included in the tables below or elsewhere in the materials accompanying
this news release. In addition, an explanation of the ways in which
Hewlett Packard Enterprise’s management uses these non-GAAP measures to
evaluate its business, the substance behind Hewlett Packard Enterprise’s
decision to use these non-GAAP measures, the material limitations
associated with the use of these non-GAAP measures, the manner in which
Hewlett Packard Enterprise’s management compensates for those
limitations, and the substantive reasons why Hewlett Packard
Enterprise’s management believes that these non-GAAP measures provide
useful information to investors is included under “Use of non-GAAP
financial measures” further below. This additional non-GAAP financial
information is not meant to be considered in isolation or as a
substitute for revenue, operating profit, operating margin, net earnings
from continuing operations, net earnings from discontinued operations,
diluted net earnings per share from continuing operations, diluted net
earnings per share from discontinued operations, cash, cash equivalents
and restricted cash, cash flow from operations, investments in property,
plant and equipment, or total company debt prepared in accordance with
GAAP.
Forward-looking statements
This press release contains forward-looking statements that involve
risks, uncertainties and assumptions. If the risks or uncertainties ever
materialize or the assumptions prove incorrect, the results of Hewlett
Packard Enterprise may differ materially from those expressed or implied
by such forward-looking statements and assumptions. All statements other
than statements of historical fact are statements that could be deemed
forward-looking statements, including but not limited to any projections
of revenue, margins, expenses, effective tax rates, the impact of the
U.S. Tax Cuts and Jobs Act of 2017, net earnings, net earnings per
share, cash flows, benefit plan funding, deferred tax assets, share
repurchases, currency exchange rates or other financial items; any
projections of the amount, timing or impact of cost savings or
restructuring charges; any statements of the plans, strategies and
objectives of management for future operations, as well as the execution
of transformation and restructuring plans and any resulting cost
savings, revenue or profitability improvements; any statements
concerning the expected development, performance, market share or
competitive performance relating to products or services; any statements
regarding current or future macroeconomic trends or events and the
impact of those trends and events on Hewlett Packard Enterprise and its
financial performance; any statements regarding pending investigations,
claims or disputes; any statements of expectation or belief; and any
statements or assumptions underlying any of the foregoing.
Risks, uncertainties and assumptions include the need to address the
many challenges facing Hewlett Packard Enterprise’s businesses; the
competitive pressures faced by Hewlett Packard Enterprise’s businesses;
risks associated with executing Hewlett Packard Enterprise’s strategy;
the impact of macroeconomic and geopolitical trends and events; the need
to manage third-party suppliers and the distribution of Hewlett Packard
Enterprise’s products and the delivery of Hewlett Packard Enterprise’s
services effectively; the protection of Hewlett Packard Enterprise’s
intellectual property assets, including intellectual property licensed
from third parties and intellectual property shared with its former
Parent; risks associated with Hewlett Packard Enterprise’s international
operations; the development and transition of new products and services
and the enhancement of existing products and services to meet customer
needs and respond to emerging technological trends; the execution and
performance of contracts by Hewlett Packard Enterprise and its
suppliers, customers, clients and partners; the hiring and retention of
key employees; integration and other risks associated with business
combination and investment transactions; and the execution, timing and
results of any transformation or restructuring plans, including
estimates and assumptions related to the cost (including any possible
disruption of Hewlett Packard Enterprise’s business) and the anticipated
benefits of the transformation and restructuring plans; the effects of
the U.S. Tax Cuts and Jobs Act and related guidance and regulations that
may be implemented; the resolution of pending investigations, claims and
disputes; and other risks that are described in Hewlett Packard
Enterprise’s Annual Report on Form 10-K for the fiscal year ended
October 31, 2018.
As in prior periods, the financial information set forth in this press
release, including tax-related items, reflects estimates based on
information available at this time. While Hewlett Packard Enterprise
believes these estimates to be reasonable, these amounts could differ
materially from reported amounts in the Hewlett Packard Enterprise
Quarterly Report on Form 10-Q for the fiscal quarter ended January 31,
2019. Hewlett Packard Enterprise assumes no obligation and does not
intend to update these forward-looking statements.
|
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||||||
| Three months ended | ||||||||||||
|
January 31, 2019 |
October 31, 2018 |
January 31, 2018 |
||||||||||
| Net revenue(a) | $ | 7,553 | $ | 7,946 | $ | 7,674 | ||||||
| Costs and expenses: | ||||||||||||
| Cost of sales | 5,207 | 5,507 | 5,505 | |||||||||
| Research and development | 466 | 440 | 389 | |||||||||
| Selling, general and administrative | 1,211 | 1,237 | 1,218 | |||||||||
| Amortization of intangible assets | 72 | 72 | 78 | |||||||||
| Impairment of goodwill | — | 88 | — | |||||||||
| Restructuring charges | — | 5 | 5 | |||||||||
| Transformation costs | 78 | (77 | ) | 245 | ||||||||
| Acquisition, disposition and other related charges | 63 | 12 | 30 | |||||||||
| Separation costs | — | 9 | (24 | ) | ||||||||
| Total costs and expenses | 7,097 | 7,293 | 7,446 | |||||||||
| Earnings from continuing operations | 456 | 653 | 228 | |||||||||
| Interest and other, net | (51 | ) | (111 | ) | (21 | ) | ||||||
| Tax indemnification adjustments(b) | 219 | (12 | ) | (919 | ) | |||||||
| Non-service net periodic benefit credit(c) | 16 | 31 | 33 | |||||||||
| Earnings from equity interests | 15 | 15 | 22 | |||||||||
| Earnings (loss) from continuing operations before taxes | 655 | 576 | (657 | ) | ||||||||
| (Provision) benefit for taxes(d) | (478 | ) | (1,348 | ) | 2,139 | |||||||
| Net earnings (loss) from continuing operations | 177 | (772 | ) | 1,482 | ||||||||
| Net earnings (loss) from discontinued operations | — | 15 | (46 | ) | ||||||||
| Net earnings (loss) | $ | 177 | $ | (757 | ) | $ | 1,436 | |||||
| Net earnings (loss) per share: | ||||||||||||
| Basic | ||||||||||||
| Continuing operations | $ | 0.13 | $ | (0.53 | ) | $ | 0.93 | |||||
| Discontinued operations | — | 0.01 | (0.03 | ) | ||||||||
| Total basic net earnings (loss) per share | $ | 0.13 | $ | (0.52 | ) | $ | 0.90 | |||||
| Diluted | ||||||||||||
| Continuing operations | $ | 0.13 | $ | (0.53 | ) | $ | 0.92 | |||||
| Discontinued operations | — | 0.01 | (0.03 | ) | ||||||||
| Total diluted net earnings (loss) per share | $ | 0.13 | $ | (0.52 | ) | $ | 0.89 | |||||
| Cash dividends declared per share | $ | 0.1125 | $ | 0.1125 | $ | 0.1500 | ||||||
|
Weighted-average shares used to compute net earnings (loss) per share: |
||||||||||||
| Basic | 1,401 | 1,459 | 1,591 | |||||||||
| Diluted | 1,412 | 1,459 | 1,619 | |||||||||
|
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
|||||||||||||||||||||||||
|
Three months |
Diluted net |
Three months |
Diluted net |
Three months |
Diluted net |
||||||||||||||||||||
| GAAP net earnings (loss) from continuing operations | $ | 177 | $ | 0.13 | $ | (772 | ) | $ | (0.53 | ) | $ | 1,482 | $ | 0.92 | |||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||||
| Amortization of intangible assets | 72 | 0.05 | 72 | 0.05 | 78 | 0.05 | |||||||||||||||||||
| Impairment of goodwill | — | — | 88 | 0.06 | — | — | |||||||||||||||||||
| Restructuring charges(c) | — | — | 5 | — | 5 | — | |||||||||||||||||||
| Transformation costs(c) | 78 | 0.06 | (57 | ) | (0.04 | ) | 245 | 0.15 | |||||||||||||||||
| Acquisition, disposition and other related charges | 63 | 0.04 | 12 | 0.01 | 30 | 0.02 | |||||||||||||||||||
| Separation costs(c) | — | — | 9 | 0.01 | (24 | ) | (0.01 | ) | |||||||||||||||||
| Tax indemnification adjustments(b) | (219 | ) | (0.16 | ) | 12 | 0.01 | 919 | 0.57 | |||||||||||||||||
| Non-service net periodic benefit credit(c) | (16 | ) | (0.01 | ) | (31 | ) | (0.02 | ) | (33 | ) | (0.02 | ) | |||||||||||||
| Loss from equity interests(e) | 38 | 0.03 | 38 | 0.03 | 37 | 0.02 | |||||||||||||||||||
| Adjustments for taxes(d)(f) | 397 | 0.28 | 1,257 | 0.85 | (2,219 | ) | (1.38 | ) | |||||||||||||||||
| Non-GAAP net earnings from continuing operations(c) | $ | 590 | $ | 0.42 | $ | 633 | $ | 0.43 | $ | 520 | $ | 0.32 | |||||||||||||
| GAAP earnings from continuing operations | $ | 456 | $ | 653 | $ | 228 | |||||||||||||||||||
| Non-GAAP adjustments related to continuing operations: | |||||||||||||||||||||||||
| Amortization of intangible assets | 72 | 72 | 78 | ||||||||||||||||||||||
| Impairment of goodwill | — | 88 | — | ||||||||||||||||||||||
| Restructuring charges(c) | — | 5 | 5 | ||||||||||||||||||||||
| Transformation costs(c) | 78 | (77 | ) | 245 | |||||||||||||||||||||
| Acquisition, disposition and other related charges | 63 | 12 | 30 | ||||||||||||||||||||||
| Separation costs(c) | — | 9 | (24 | ) | |||||||||||||||||||||
| Non-GAAP earnings from continuing operations | $ | 669 | $ | 762 | $ | 562 | |||||||||||||||||||
| GAAP operating margin from continuing operations | 6 | % | 8 | % | 3 | % | |||||||||||||||||||
| Non-GAAP adjustments from continuing operations | 3 | % | 2 | % | 4 | % | |||||||||||||||||||
| Non-GAAP operating margin from continuing operations | 9 | % | 10 | % | 7 | % | |||||||||||||||||||
| GAAP net earnings (loss) from discontinued operations | $ | — | $ | — | $ | 15 | $ | 0.01 | $ | (46 | ) | $ | (0.03 | ) | |||||||||||
| Non-GAAP adjustments related to discontinued operations: | |||||||||||||||||||||||||
| Separation costs | — | — | — | — | 51 | 0.03 | |||||||||||||||||||
| Tax indemnification adjustments | — | — | (11 | ) | (0.01 | ) | (4 | ) | — | ||||||||||||||||
| Adjustments for taxes | — | — | (4 | ) | — | (1 | ) | — | |||||||||||||||||
| Non-GAAP net earnings from discontinued operations | $ | — | $ | — | $ | — | $ | — | $ | — |
|
|
|
$ | — | ||||||||||
| Total GAAP net earnings (loss) | $ | 177 | $ | 0.13 | $ | (757 | ) | $ | (0.52 | ) | $ | 1,436 | $ | 0.89 | |||||||||||
| Total Non-GAAP net earnings | $ | 590 | $ | 0.42 | $ | 633 | $ | 0.43 | $ | 520 | $ | 0.32 | |||||||||||||
|
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||
| As of | ||||||||
| January 31, 2019 | October 31, 2018 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,781 | $ | 4,880 | ||||
| Accounts receivable | 3,183 | 3,263 | ||||||
| Financing receivables | 3,487 | 3,396 | ||||||
| Inventory | 2,300 | 2,447 | ||||||
| Assets held for sale | 14 | 6 | ||||||
| Other current assets(g) | 2,667 | 3,280 | ||||||
| Total current assets | 15,432 | 17,272 | ||||||
| Property, plant and equipment | 6,141 | 6,138 | ||||||
| Long-term financing receivables and other assets | 9,438 | 11,359 | ||||||
| Investments in equity interests | 2,413 | 2,398 | ||||||
| Goodwill and intangible assets | 18,334 | 18,326 | ||||||
| Total assets | $ | 51,758 | $ | 55,493 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Notes payable and short-term borrowings | $ | 2,073 | $ | 2,005 | ||||
| Accounts payable | 5,789 | 6,092 | ||||||
| Employee compensation and benefits | 1,142 | 1,412 | ||||||
| Taxes on earnings | 295 | 378 | ||||||
| Deferred revenue | 3,152 | 3,177 | ||||||
| Accrued restructuring | 239 | 294 | ||||||
| Other accrued liabilities | 3,769 | 3,840 | ||||||
| Total current liabilities | 16,459 | 17,198 | ||||||
| Long-term debt | 10,280 | 10,136 | ||||||
| Other non-current liabilities | 6,684 | 6,885 | ||||||
| Stockholders’ equity | ||||||||
| HPE stockholders’ equity: | ||||||||
|
Preferred stock, $0.01 par value (300 shares authorized; none issued and outstanding at January 31, 2019) |
— | — | ||||||
|
Common stock, $0.01 par value (9,600 shares authorized; 1,378 and 1,423 shares issued and outstanding at January 31, 2019 and October 31, 2018, respectively) |
14 | 14 | ||||||
| Additional paid-in capital | 29,607 | 30,342 | ||||||
| Accumulated deficit(i) | (8,034 | ) | (5,899 | ) | ||||
| Accumulated other comprehensive loss | (3,294 | ) | (3,218 | ) | ||||
| Total HPE stockholders’ equity | 18,293 | 21,239 | ||||||
| Non-controlling interests | 42 | 35 | ||||||
| Total stockholders’ equity | 18,335 | 21,274 | ||||||
| Total liabilities and stockholders’ equity | $ | 51,758 | $ | 55,493 | ||||
|
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||
| Three Months Ended January 31, | ||||||||
| 2019 | 2018 | |||||||
| Cash flows from operating activities: | ||||||||
| Net earnings | $ | 177 | $ | 1,436 | ||||
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
| Depreciation and amortization | 639 | 635 | ||||||
| Stock-based compensation expense | 75 | 103 | ||||||
| Provision for doubtful accounts and inventory | 42 | 41 | ||||||
| Restructuring charges | 33 | 174 | ||||||
| Deferred taxes on earnings | 370 | (1,335 | ) | |||||
| Earnings from equity interests | (15 | ) | (22 | ) | ||||
| Other, net | 46 | 102 | ||||||
| Changes in operating assets and liabilities, net of acquisitions: | ||||||||
| Accounts receivable | 113 | (34 | ) | |||||
| Financing receivables | (156 | ) | (287 | ) | ||||
| Inventory | 99 | (146 | ) | |||||
| Accounts payable | (256 | ) | (107 | ) | ||||
| Taxes on earnings | (107 | ) | (1,009 | ) | ||||
| Restructuring | (110 | ) | (226 | ) | ||||
| Other assets and liabilities | (568 | ) | 817 | |||||
| Net cash provided by operating activities | 382 | 142 | ||||||
| Cash flows from investing activities: | ||||||||
| Investment in property, plant and equipment | (729 | ) | (669 | ) | ||||
| Proceeds from sale of property, plant and equipment | 157 | 115 | ||||||
| Purchases of available-for-sale securities and other investments | (5 | ) | (3 | ) | ||||
|
Maturities and sales of available-for-sale securities and other investments |
1 | — | ||||||
| Financial collateral posted | (245 | ) | (738 | ) | ||||
| Financial collateral returned | 281 | 164 | ||||||
|
Payments made in connection with business acquisitions, net of cash acquired |
(76 | ) | — | |||||
| Net cash used in investing activities | (616 | ) | (1,131 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Short-term borrowings with original maturities less than 90 days, net | (12 | ) | (3 | ) | ||||
| Proceeds from debt, net of issuance costs | 389 | 270 | ||||||
| Payment of debt | (334 | ) | (253 | ) | ||||
| Net proceeds related to stock-based award activities | (17 | ) | 17 | |||||
| Repurchase of common stock | (814 | ) | (742 | ) | ||||
| Net transfer of cash and cash equivalents to Everett | — | (28 | ) | |||||
| Net transfer of cash and cash equivalents to Seattle | — | (70 | ) | |||||
| Cash dividends paid | (157 | ) | (120 | ) | ||||
| Net cash used in financing activities | (945 | ) | (929 | ) | ||||
| Decrease in cash, cash equivalents and restricted cash(g) | (1,179 | ) | (1,918 | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period(g) | 5,084 | 9,592 | ||||||
|
Cash, cash equivalents and restricted cash at end of period(g) |
$ | 3,905 | $ | 7,674 | ||||
|
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES SEGMENT INFORMATION (Unaudited) (In millions) |
||||||||||||
| Three months ended | ||||||||||||
|
January 31, 2019 |
October 31, 2018 |
January 31, 2018 |
||||||||||
| Net revenue:(a)(h) | ||||||||||||
| Hybrid IT | $ | 5,970 | $ | 6,338 | $ | 6,158 | ||||||
| Intelligent Edge | 686 | 773 | 656 | |||||||||
| Financial Services | 919 | 939 | 888 | |||||||||
| Corporate Investments | 118 | 139 | 136 | |||||||||
| Total segment net revenue | 7,693 | 8,189 | 7,838 | |||||||||
| Elimination of intersegment net revenue and other | (140 | ) | (243 | ) | (164 | ) | ||||||
| Total Hewlett Packard Enterprise consolidated net revenue | $ | 7,553 | $ | 7,946 | $ | 7,674 | ||||||
| Earnings from continuing operations before taxes:(c)(h) | ||||||||||||
| Hybrid IT | $ | 675 | $ | 716 | $ | 572 | ||||||
| Intelligent Edge | 9 | 86 | 34 | |||||||||
| Financial Services | 77 | 71 | 71 | |||||||||
| Corporate Investments | (28 | ) | (12 | ) | (26 | ) | ||||||
| Total segment earnings from operations(c)(h) | 733 | 861 | 651 | |||||||||
| Unallocated corporate costs and eliminations(c) | (50 | ) | (90 | ) | (59 | ) | ||||||
| Unallocated stock-based compensation expense | (14 | ) | (9 | ) | (30 | ) | ||||||
| Amortization of intangible assets | (72 | ) | (72 | ) | (78 | ) | ||||||
| Impairment of goodwill | — | (88 | ) | — | ||||||||
| Restructuring charges(c) | — | (5 | ) | (5 | ) | |||||||
| Transformation costs(c) | (78 | ) | 77 | (245 | ) | |||||||
| Acquisition, disposition and other related charges | (63 | ) | (12 | ) | (30 | ) | ||||||
| Separation costs(c) | — | (9 | ) | 24 | ||||||||
|
Interest and other, net |
(51 | ) | (111 | ) | (21 | ) | ||||||
| Tax indemnification adjustments(b) | 219 | (12 | ) | (919 | ) | |||||||
| Non-service net periodic benefit credit(c) | 16 | 31 | 33 | |||||||||
| Earnings from equity interests | 15 | 15 | 22 | |||||||||
|
Total Hewlett Packard Enterprise consolidated earnings (loss) from continuing operations before taxes |
$ | 655 | $ | 576 | $ | (657 | ) | |||||
|
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES SEGMENT/BUSINESS UNIT INFORMATION (Unaudited) (In millions, except percentages) |
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| Three months ended | Change (%) | |||||||||||||||||
|
January 31, |
October 31, |
January 31, |
Q/Q | Y/Y | ||||||||||||||
| Net revenue:(a)(h) | ||||||||||||||||||
| Hybrid IT | ||||||||||||||||||
| Hybrid IT Product | ||||||||||||||||||
| Compute | $ | 3,402 | $ | 3,707 | $ | 3,518 | (8 | %) | (3 | %) | ||||||||
| Storage | 975 | 959 | 948 | 2 | % | 3 | % | |||||||||||
| Total Hybrid IT Product | 4,377 | 4,666 | 4,466 | (6 | %) | (2 | %) | |||||||||||
| HPE Pointnext | 1,593 | 1,672 | 1,692 | (5 | %) | (6 | %) | |||||||||||
| Total Hybrid IT | 5,970 | 6,338 | 6,158 | (6 | %) | (3 | %) | |||||||||||
| Intelligent Edge | ||||||||||||||||||
| HPE Aruba Product | 597 | 685 | 582 | (13 | %) | 3 | % | |||||||||||
| HPE Aruba Services | 89 | 88 | 74 | 1 | % | 20 | % | |||||||||||
| Total Intelligent Edge | 686 | 773 | 656 | (11 | %) | 5 | % | |||||||||||
| Financial Services | 919 | 939 | 888 | (2 | %) | 3 | % | |||||||||||
| Corporate Investments | 118 | 139 | 136 | (15 | %) | (13 | %) | |||||||||||
| Total segment net revenue | 7,693 | 8,189 | 7,838 | (6 | %) | (2 | %) | |||||||||||
| Elimination of intersegment net revenue and other | (140 | ) | (243 | ) | (164 | ) | (42 | %) | (15 | %) | ||||||||
| Total Hewlett Packard Enterprise consolidated net revenue | $ | 7,553 | $ | 7,946 | $ | 7,674 | (5 | %) | (2 | %) | ||||||||
|
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES SEGMENT OPERATING MARGIN SUMMARY DATA (Unaudited) |
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| Three months ended |
Change in Operating Margin (pts) |
|||||
| January 31, 2019 | Q/Q | Y/Y | ||||
| Segment operating margin:(c)(h) | ||||||
| Hybrid IT |
11.3 % |
0 pts | 2.0 pts | |||
| Intelligent Edge |
1.3 % |
(9.8) pts | (3.9) pts | |||
| Financial Services |
8.4 % |
0.8 pts | 0.4 pts | |||
| Corporate Investments |
(23.7)% |
(15.1) pts | (4.6) pts | |||
| Total segment operating margin |
9.5 % |
(1.0) pts | 1.2 pts | |||
Contacts
Kate Holderness
kate.holderness@hpe.com
HPE Investor Relations
Investor.relations@hpe.com