Shares of cloud services and server maker Hewlett Packard Enterprises (HPE) - Get Report fell after-hours Tuesday after the company reported first quarter revenue results that missed analyst estimates.
The company reported earnings of 44 cents per share on revenue of $6.9 billion. Analysts were expecting the company to report first quarter earnings of 44 cents per share on revenue of $7.24 billion.
A year ago, the company reported earnings of 42 cents per share on revenue of $7.55 billion. Analysts were expecting a decline in revenue, but HPE’s decline was even sharper than expected.
Shares were falling 2.2% to $12.31 in after-hours trading on Tuesday. HPE has had a rough year in 2020, falling nearly 20% year to date heading into its earnings report.
“HPE’s first quarter results demonstrate continued progress against our strategic priorities to shift our company to higher-margin and more recurring revenues against a dynamic market backdrop,” said CEO Antonio Neri.
Neri said that the decline in revenue was primarily due to its compute business though it did have better returns in its Intelligent Edge, High Performance Compute and Big Data Storage businesses.
“Faced with continued macro uncertainty, I am confident we are managing our business with discipline and focus, taking the right actions, and advancing our pivot to deliver unique edge-to-cloud experiences as a service,” Neri said.
For the rest of 2020, HPE expects non-GAAP earnings to range between $1.78 and $1.94 per share. The midpoint of this range was right in line with analyst expectations for the company to report earnings of $1.86 per share for the year. The company did not provide revenue guidance.