Fri. Jun 5th, 2020

Hewlett Packard Enterprise cuts cash flow outlook on coronavirus impact, shares down

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FILE PHOTO: A trader passes by the post where Hewlett Packard Enterprise Co., is traded on the floor of the New York Stock Exchange

(Reuters) – Hewlett Packard Enterprise <HPE.N> on Tuesday cut its free cash flow forecast for the year citing supply constraints due to the coronavirus outbreak, and reported a lower-than-expected quarterly revenue.

The computer hardware maker’s shares fell more than 5% in after-market trading.

HPE now expects 2020 free cash flow between $1.6 billion and $1.8 billion, down from its prior outlook of $1.9 billion to $2.1 billion.

“The health issue is causing disruption to both supply and demand, and while we cannot quantify the real impact at this time, we’re monitoring the situation closely and are working with our suppliers to minimize potential impact,” Chief Financial Officer Tarek Robbiati said on a post earnings call with analysts.

Revenue fell 8% to $6.9 billion in the first quarter due to a fall in compute and storage segment results, as supply shortages weighed on sales. Analysts had estimated revenue of $7.21 billion, according to Refinitiv data.

On an adjusted basis, net earnings fell to $575 million, or 44 cents per share, from $590 million, or 42 cents per share, a year earlier.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Shailesh Kuber)

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