Hewlett Packard Enterprise Co. shares dropped sharply Thursday afternoon after the company reported lower sales than expected and slashed its earnings projections for the fiscal year. HPE revealed net income of $267 million, or 16 cents a share, on sales of $11.41 billion for the fiscal first quarter. After adjusting for restructuring charges and a host of other costs, HPE claimed adjusted profit of 45 cents a share. Analysts on average expected HPE to report adjusted earnings of 44 cents a share, the midpoint of HPE’s forecast of 42 cents to 46 cents a share, on sales of $12.06 billion. HPE brought down its previous forecast for full-year earnings, to a range of 60 cents to 70 cents a share on a GAAP basis and $1.88 to $1.98 a share after adjustments. HP’s previous projections called for standard profit of 72 cents to 82 cents a share and adjusted earnings of $2 to $2.10 a share. In its announcement, HPE cited three “significant headwinds” that have developed since those projections were provided in October: “increased pressure from foreign exchange movements, higher commodities pricing, and some near-term execution issues.” HPE shares dropped nearly 6% in late trading, after closing with a 0.5% decline at $24.66.
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