Categories AlphaGraphs, Earnings, Technology

Hewlett Packard Enterprise (HPE) slips to a loss in Q2, misses estimates

Hewlett Packard Enterprise Company (NYSE: HPE) reported its financial results for the quarter ended April 30, 2020, on Thursday after the market closes. The results missed analysts’ expectations.

Hewlett Packard Enterprise (HPE) Q2 2020 earnings

The company slipped to a loss in the second quarter of 2020 from a profit last year, due to lower revenue and the inclusion of non-cash write-down of legacy goodwill. The global economic lockdowns since February significantly impacted the company’s fiscal Q2 financial performance.

The top line fell by 16% due to supply chain constraints and delays in customer acceptance, which resulted in significantly higher levels of backlog, particularly in Compute, HPC & MCS, and Storage. Further, the company will not provide guidance for Q3 or full-year due to the increased level of uncertainty of the pandemic.

The board of directors approved a Cost Optimization and Prioritization Plan to prioritize investments and realign resources to areas of growth: Three-year plan, to be implemented through the fiscal year 2022; Estimated gross savings of at least $1 billion and annualized net run-rate savings of at least $800 million; and Expected cash funding payments of $1-1.3 billion.

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