Hewlett-Packard Enterprise (HPE) launched a new page, expecting second-quarter sales below Wall Street estimates as businesses cut spending on the server maker’s technical solutions.
Hewlett-Packard Enterprise (HPE.N) opened a new page on Thursday, forecasting second-quarter revenue below Wall Street projections as businesses reduce spending on the server maker’s technological solutions.
Shares of the Spring, Texas-based corporation slid around 3% in extended trade.
An unstable economy and high interest rates have prompted clients to reduce expenses in order to increase profitability.
Enterprises are cautious about signing new contracts, committing to long-term initiatives, or collaborating with new technology providers, despite the fact that IT spending is likely to climb in 2024, according to Gartner.
According to LSEG statistics, HPE expects revenue in the second quarter to be between $6.6 billion and $7 billion, which is lower than analysts’ average forecast of $7.11 billion.
HPE also announced a 13.5% drop in first-quarter revenue to $6.76 billion, missing expectations of $7.11 billion.
CFO Marie Myers stated that the “softening of the networking market and GPU deal timing” harmed the company in the first quarter.
On an adjusted basis, HPE reported 48 cents per share in the November-to-January quarter, which exceeded expectations of 45 cents.
The annualized revenue run-rate, a measure of future revenue, increased 42% to $1.4 billion in the reported quarter.
Analysts believe that HPE’s planned $14 billion acquisition of Juniper Networks will roughly treble its networking market share.
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