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Hewlett Packard (HPE) Falls on FY23 GAAP EPS Outlook Cut
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Hewlett Packard Enterprise (HPE - Free Report) shares have declined more than 4% in the pre-market trade today as the company lowered its fiscal 2023 GAAP net earnings per share (EPS) forecasts. In its latest announcement, HPE estimates fiscal 2023 GAAP net EPS in the range of $1.35 to $1.39, lower than the previous forecast range of $1.42 to $1.46.
However, the company reiterated its projections for revenue growth, non-GAAP earnings and free cash flow. HPE continues to anticipate 4-6% constant currency growth in revenues for fiscal 2023. It also reaffirmed earlier guidance for non-GAAP EPS of $2.11-$2.15, as well as a free cash flow projection of $1.9 billion to $2.1 billion.
Hewlett Packard believes that the top line and profitability growth momentum will continue in fiscal 2024. It predicts 2-4% revenue growth in constant currency. For fiscal 2024, the company anticipates GAAP EPS of $1.83 to $2.03 and non-GAAP EPS between $1.82 and $2.02. HPE also expects to generate free cash flow in the range of $1.9-$2.1 billion during the next year.
Hewlett Packard Enterprise Company Price and Consensus
HPE also provided a robust long-term outlook spanning from fiscal 2024 to fiscal 2026. The company anticipates sustained annual revenue growth in the range of 2-4% in constant currency. Additionally, it foresees a compounded annual growth rate for the annualized revenue run rate in the 35-45% band.
Hewlett Packard's performance can be attributed to its segments, which include Intelligent Edge and GreenLake. Additionally, the company possesses a strong competitive advantage in the artificial intelligence and Compute market.
The Intelligent Edge segment is the highest profit generating among all the segments and on track to be a $5 billion annual business in fiscal 2023. In third-quarter fiscal 2023, the segment had the non-GAAP operating margin of 29.7% and had contributed 58.5% to the company’s total non-GAAP operating profit. The business unit accounted for 20% of HPE's total revenues.
HPE is also making strides in its Cloud segment with HPE GreenLake, which is strengthening the company’s other service pivots. In the third-quarter earnings report, it was highlighted that GreenLake saw a remarkable 122% year-over-year increase in orders. Hewlett Packard is forming a Hybrid Cloud Business unit, merging HPE GreenLake with HPE Storage, GreenLake Cloud Services and the CTO team. This will fast-track its hybrid cloud strategy, offering a unified portfolio of storage, software, data and cloud services through HPE GreenLake.
Zacks Rank and Stocks to Consider
Currently, Hewlett Packard carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for NVIDIA's third-quarter fiscal 2024 earnings has been revised upward by 2 cents to $3.34 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 7 cents to $10.74 per share in the past 30 days.
NVIDIA’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 9.8%. Shares of NVDA have rallied 188.1% year to date.
The Zacks Consensus Estimate for SPLK's third-quarter fiscal 2024 earnings has been revised upward by a penny to $1.12 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 2 cents to $3.78 per share in the past 30 days.
Splunk’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 155%. Shares of SPLK have surged 71.8% year to date.
The Zacks Consensus Estimate for PANW's first-quarter fiscal 2024 earnings has been revised upward by 6 cents to $1.16 per share in the past 60 days. For fiscal 2024, earnings estimates have increased by 39 cents to $5.34 per share in the past 60 days.
Palo Alto's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 22.19%. Shares of PANW have surged 81.4% year to date
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Hewlett Packard (HPE) Falls on FY23 GAAP EPS Outlook Cut
Hewlett Packard Enterprise (HPE - Free Report) shares have declined more than 4% in the pre-market trade today as the company lowered its fiscal 2023 GAAP net earnings per share (EPS) forecasts. In its latest announcement, HPE estimates fiscal 2023 GAAP net EPS in the range of $1.35 to $1.39, lower than the previous forecast range of $1.42 to $1.46.
However, the company reiterated its projections for revenue growth, non-GAAP earnings and free cash flow. HPE continues to anticipate 4-6% constant currency growth in revenues for fiscal 2023. It also reaffirmed earlier guidance for non-GAAP EPS of $2.11-$2.15, as well as a free cash flow projection of $1.9 billion to $2.1 billion.
Hewlett Packard believes that the top line and profitability growth momentum will continue in fiscal 2024. It predicts 2-4% revenue growth in constant currency. For fiscal 2024, the company anticipates GAAP EPS of $1.83 to $2.03 and non-GAAP EPS between $1.82 and $2.02. HPE also expects to generate free cash flow in the range of $1.9-$2.1 billion during the next year.
Hewlett Packard Enterprise Company Price and Consensus
Hewlett Packard Enterprise Company price-consensus-chart | Hewlett Packard Enterprise Company Quote
HPE is Optimistic About Long-Term Prospects
HPE also provided a robust long-term outlook spanning from fiscal 2024 to fiscal 2026. The company anticipates sustained annual revenue growth in the range of 2-4% in constant currency. Additionally, it foresees a compounded annual growth rate for the annualized revenue run rate in the 35-45% band.
Hewlett Packard's performance can be attributed to its segments, which include Intelligent Edge and GreenLake. Additionally, the company possesses a strong competitive advantage in the artificial intelligence and Compute market.
The Intelligent Edge segment is the highest profit generating among all the segments and on track to be a $5 billion annual business in fiscal 2023. In third-quarter fiscal 2023, the segment had the non-GAAP operating margin of 29.7% and had contributed 58.5% to the company’s total non-GAAP operating profit. The business unit accounted for 20% of HPE's total revenues.
HPE is also making strides in its Cloud segment with HPE GreenLake, which is strengthening the company’s other service pivots. In the third-quarter earnings report, it was highlighted that GreenLake saw a remarkable 122% year-over-year increase in orders. Hewlett Packard is forming a Hybrid Cloud Business unit, merging HPE GreenLake with HPE Storage, GreenLake Cloud Services and the CTO team. This will fast-track its hybrid cloud strategy, offering a unified portfolio of storage, software, data and cloud services through HPE GreenLake.
Zacks Rank and Stocks to Consider
Currently, Hewlett Packard carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology sector are NVIDIA (NVDA - Free Report) , Splunk and Palo Alto Networks (PANW - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA's third-quarter fiscal 2024 earnings has been revised upward by 2 cents to $3.34 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 7 cents to $10.74 per share in the past 30 days.
NVIDIA’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 9.8%. Shares of NVDA have rallied 188.1% year to date.
The Zacks Consensus Estimate for SPLK's third-quarter fiscal 2024 earnings has been revised upward by a penny to $1.12 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 2 cents to $3.78 per share in the past 30 days.
Splunk’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 155%. Shares of SPLK have surged 71.8% year to date.
The Zacks Consensus Estimate for PANW's first-quarter fiscal 2024 earnings has been revised upward by 6 cents to $1.16 per share in the past 60 days. For fiscal 2024, earnings estimates have increased by 39 cents to $5.34 per share in the past 60 days.
Palo Alto's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 22.19%. Shares of PANW have surged 81.4% year to date