HPE Reports Fiscal 2016 Full-Year and Fourth Quarter Results

November 23, 2016

Nov. 23 — Hewlett Packard Enterprise (NYSE: HPE) has announced financial results for fiscal 2016 and the fourth quarter, ended October 31, 2016.

Fiscal 2016 net revenue of $50.1 billion was down 4% from the prior-year period, up 2% when adjusted for divestitures and currency.

Fiscal 2016 GAAP diluted net earnings per share (EPS) was $1.82, up from $1.34 in the prior-year period, and below its previously provided outlook of $2.09 to $2.14. Fiscal 2016 non-GAAP diluted net EPS was $1.92, up from adjusted non-GAAP diluted net EPS of $1.84 in the prior-year period, and within its previously provided outlook of $1.90 to $1.95. Fiscal 2016 non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $176 million and $0.10 per diluted share, respectively, related to the gains on the divestitures of H3C and MphasiS, restructuring charges, amortization of intangible assets, separation costs, tax indemnification adjustments, tax settlements, acquisition and other related charges, and an adjustment to loss from equity interests.

Fourth quarter net revenue of $12.5 billion was down 7% from the prior-year period, down 2% when adjusted for divestitures and currency.

Fourth quarter GAAP diluted net earnings per share (EPS) was $0.18, down from $0.75 in the prior-year period, and below its previously provided outlook of $0.44 to $0.49. Fourth quarter non-GAAP diluted net EPS was $0.61, up from adjusted non-GAAP diluted net EPS of $0.52 in the prior-year period, and within its previously provided outlook of $0.58 to $0.63. Fourth quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $733 million and $0.43 per diluted share, respectively, related to tax settlements, restructuring charges, tax indemnification adjustments, separation costs, gains on the divestitures of H3C and MphasiS, amortization of intangible assets, acquisition and other related charges, and an adjustment to loss from equity interests.

“FY16 was a historic year for Hewlett Packard Enterprise,” said Meg Whitman, President and CEO of Hewlett Packard Enterprise. “During our first year as a standalone company, HPE delivered the business performance we promised, fulfilled our commitment to introduce groundbreaking innovation, and began to transform the company through strategic changes designed to enable even better financial performance.”

Outlook

For the fiscal 2017 first quarter, Hewlett Packard Enterprise estimates GAAP diluted net EPS to be in the range of $0.03 to $0.07 and non-GAAP diluted net EPS to be in the range of $0.42 to $0.46. Fiscal 2017 first quarter non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.39 per share, related primarily to separation costs, restructuring charges and the amortization of intangible assets.

For fiscal 2017, Hewlett Packard Enterprise estimates GAAP diluted net EPS to be in the range of $0.72 to $0.82 and non-GAAP diluted net EPS to be in the range of $2.00 to $2.10. Fiscal 2017 non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $1.28 per share, related primarily to separation costs, restructuring charges and the amortization of intangible assets.

Fiscal 2016 fourth quarter segment results

  • Enterprise Group revenue was $6.7 billion, down 9% year over year, down 3% when adjusted for divestitures and currency, with a 13.2% operating margin. Servers revenue was down 7%, down 6% when adjusted for divestitures and currency, Storage revenue was down 5%, down 3% when adjusted for divestitures and currency, Networking revenue was down 34%, flat when adjusted for divestitures and currency, and Technology Services revenue was down 4%, up 2% when adjusted for divestitures and currency.
  • Enterprise Services revenue was $4.7 billion, down 6% year over year, down 2% when adjusted for divestitures and currency, with a 10.7% operating margin. Infrastructure Technology Outsourcing revenue was down 7%, down 5% when adjusted for divestitures and currency, and Application and Business Services revenue was down 3%, up 4% when adjusted for divestitures and currency.
  • Software revenue was $903 million, down 6% year over year, flat when adjusted for divestitures and currency, with a 32.1% operating margin. License revenue was down 5%, down 1% when adjusted for divestitures and currency, support revenue was down 7%, up 1% when adjusted for divestitures and currency, professional services revenue was down 7%, down 4% adjusted for divestitures and currency, and software-as-a-service (SaaS) revenue was down 1%, up 11% adjusted for divestitures and currency.
  • Financial Services revenue was $814 million, up 2% year over year, net portfolio assets were up 4%, and financing volume was down 4%. The business delivered an operating margin of 10.2%.

Revenue adjusted for divestitures and currency excludes revenue resulting from businesses divestitures in fiscal 2016, 2015 and 2014 and also assumes no change in the foreign exchange rate from the prior-year period. A reconciliation of GAAP revenue to revenue adjusted for divestitures and currency is provided in the earnings presentation at investors.hpe.com.

About Hewlett Packard Enterprise

Hewlett Packard Enterprise (HPE) is an industry leading technology company that enables customers to go further, faster. With the industry’s most comprehensive portfolio, spanning the cloud to the data center to workplace applications, our technology and services help customers around the world make IT more efficient, more productive and more secure.


Source: HPE

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