Analysts expect macroeconomic weakness to continue to pressure the compute, storage and networking sectors
[MEXICO CITY] Hewlett Packard Enterprise (HPE) forecast first-quarter revenue below Wall Street estimates on Thursday (Dec 4), due to cautious enterprise spending amid economic uncertainty, sending its shares down 5 per cent in extended trading.
Enterprise customer spending has remained weak due to cost-optimisation 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 optimise costs on existing hardware, pressuring vendors such as 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 US$9.4 billion for the first quarter, compared with analysts’ average estimate of US$9.9 billion, according to data compiled by LSEG.
HPE’s server revenue for the three months ended Oct 31 fell 5 per cent to US$4.5 billion, while revenue at its hybrid cloud segment fell 12 per cent to US$1.41 billion.
Total revenue for the quarter stood at US$9.7 billion, below estimates of US$9.9 billion.
HPE raised its fiscal 2026 adjusted earnings per share expectations to be in the range of US$2.25 to US$2.45, from a prior projection between US$2.20 and US$2.40. REUTERS
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