Hewlett Packard forecasts weak quarterly revenue, shares fall

Hewlett Packard Enterprise forecast first-quarter revenue below Wall Street estimates on Thursday, due to cautious enterprise spending amid economic uncertainty, sending its shares down five per cent in extended trading.. THE CANADIAN PRESS/AP/Charles Krupa

Hewlett Packard Enterprise forecast first-quarter revenue below Wall Street estimates on Thursday, due to cautious enterprise spending amid economic uncertainty, sending its shares down five per cent in extended trading.

Enterprise customer spending has remained weak due to cost-optimization efforts in the wake of economic uncertainty and high interest rates, hitting companies such as HPE.

While companies are investing heavily to build out AI capabilities, they are also trying to optimize costs on existing hardware, pressuring vendors like HPE and Dell Technologies.

Analysts expect macroeconomic weakness to continue to pressure the compute, storage and networking sectors.

HPE is also grappling with intensifying competition from rival server makers, including Dell Technologies and Super Micro Computer.

The company expects revenue in the range of US$9 billion to $9.4 billion for the first quarter, compared with analysts’ average estimate of $9.90 billion, according to data compiled by LSEG.

HPE’s server revenue for the three months ended Oct. 31 fell five per cent to $4.5 billion, while revenue at its hybrid cloud segment fell 12 per cent to $1.41 billion.

Total revenue for the quarter stood at $9.68 billion, below estimates of $9.94 billion.

HPE raised its fiscal 2026 adjusted earnings per share expectations to be in the range of $2.25 to $2.45, from prior projection between $2.20 and $2.40.

(Reporting by Juby Babu in Mexico City; Editing by Krishna Chandra Eluri)