HPE stock dives after earnings and sales miss amid ‘inflationary environment and ongoing supply chain disruptions’

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Hewlett Packard Enterprise Co. reported on Wednesday of plan results from a year ago amid doubts about the environment for business spending on technology hardware, and the actions were placed in the afternoon.

+ 1.28%
reported second-quarter net income of $ 250 million, or 19 cents per share, compared to net income of $ 259 million, or 19 cents per share, the same quarter a year ago. HPE said the EPS was held due to a $ 126 million charge related to suspended business operations in Russia. HPE said the adjusted earnings were 44 cents a share, 4% less than last year’s quarter.

HPE revenue of $ 6.7 billion was slightly higher than the $ 6.7 billion reported a year ago. Analysts polled by FactSet expected a tight profit of 45 cents per share with revenue of $ 6.8 billion.

“We are particularly pleased with the resilience of our gross margins (34%) despite the inflationary environment and continued supply chain disruptions,” Tarek Robbiati, chief financial officer of HPE, said in a statement.

HPE shares fell more than 6% in out-of-hours operations immediately after the release of the results. Shares have fallen 1% in 2022 as the S&P 500 SPX index
has decreased by 14%.

HPE has been in doubt since Cisco Systems Inc. CSCO,
+ 0.40%
provided a disappointing forecast last month, which has sparked fears that companies will cut back on spending on technology. B. of A. Securities downgraded the shares as a result of this report, along with Pure Storage Inc. PSTG,
+ 1.31%,
which was also expected to report gains on Wednesday afternoon.

Computer sales ($ 3 billion, the same as a year ago) and storage ($ 1.1 billion, up 3%) were the monetary leaders. Intelligent Edge’s revenue was $ 867 million, up 8% from the same quarter a year ago.

HPE offered a third-quarter adjusted earnings target of between 44 and 54 cents per share, within the FactSet analysts’ average forecast of 51 cents per share.

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