Shares of Hewlett-Packard Enterprise Co. (NYSE: HPE) were down 10.7% on Wednesday after the enterprise computing and technology company announced mixed quarterly results, but followed with cautious forward guidance.
More specifically on the former, HPE's quarterly net revenue climbed 9.7% year over year to $7.47 billion, which translated to adjusted (non-GAAP) net income of $536 million, or $0.34 per diluted share, down slightly from $0.35 per share in the same year-ago period.
Analysts, on average, were only looking for earnings of $0.31 per share on revenue of $7.38 billion.
"Our strong Q1 performance is proof that we have the right strategy and improved execution," elaborated HPE CEO Antonio Neri. "We had good revenue growth across every business segment, continued to execute HPE Next with no disruption to the business, and delivered strong shareholder returns in the form of share repurchases and dividends."
To be sure, HPE returned a whopping $862 million to shareholders through dividends and share repurchases, and Neri added that the company is increasing its commitment to capital returns -- to $7 billion by the end of fiscal 2019 -- thanks to recent tax reform in the U.S. that enables easier access to its offshore cash.
Even so, HPE also said it expects fiscal second-quarter adjusted earnings in the range of $0.29 to $0.33, below consensus estimates for fiscal Q2 adjusted earnings of $0.36 per share. And for the full fiscal-year 2018, Hewlett-Packard Enterprise anticipates adjusted earnings per share of $1.35 to $1.45, which is technically in line with most investors' expectations for full-year earnings of $1.41 per share.
During the subsequent conference call -- and with the caveat that HPE has "great momentum" working in its favor -- Neri also told investors to expect a "more challenging second half" with growth rates moderating given more difficult year-over-year comparisons.
To be fair, that's not exactly indicative of deeper problems with HPE's underlying business. But with HPE stock up nearly 30% from its 52-week lows set last June, it shouldn't be terribly surprising to see the stock pulling back given these words of caution.
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