HPE Reports Fiscal 2018 Full-Year and Fourth Quarter Results

PALO ALTO, Calif., Dec. 04, 2018 (GLOBE NEWSWIRE) — Hewlett Packard Enterprise (HPE) today announced financial results for its fiscal 2018 and the fourth quarter, ended October 31, 2018.

Fourth Quarter Fiscal Year 2018 Results 
Fourth quarter net revenue of $7.9 billion was up 4% from the prior-year period and up 3% when adjusted for currency.

Fourth quarter GAAP diluted net earnings per share (“EPS”) from continuing operations was ($0.53), down from GAAP diluted net EPS from continuing operations of $0.23 in the prior-year period.

Fourth quarter non-GAAP diluted net EPS from continuing operations was $0.45, up from non-GAAP diluted net EPS from continuing operations of $0.29 in the prior-year period. Fourth quarter non-GAAP net earnings from continuing operations and non-GAAP diluted net EPS from continuing operations exclude after-tax adjustments of $1.4 billion and $0.98 per diluted share, respectively, primarily related to the impact of U.S. tax reform, impairment of goodwill, amortization of intangible assets, an adjustment to earnings from equity interests and tax indemnification adjustments.

Fiscal 2018 Full-Year Results
Fiscal 2018 net revenue of $30.9 billion was up 7% from the prior-year period and up 5% when adjusted for currency.

Fiscal 2018 GAAP diluted net EPS from continuing operations was $1.30, up from GAAP diluted net EPS from continuing operations of $0.26 in the prior-year period.

Fiscal 2018 non-GAAP diluted net EPS from continuing operations was $1.56, up from non-GAAP diluted net EPS from continuing operations of $0.96 in the prior year. Fiscal 2018 non-GAAP net earnings from continuing operations and non-GAAP diluted net EPS from continuing operations exclude after-tax adjustments of $406 million and $0.26 per diluted share, respectively, primarily related to the impact of U.S. tax reform, transformation costs, amortization of intangible assets, an adjustment to earnings from equity interests, tax indemnification adjustments and income tax valuation allowances. Fiscal 2018 adjusted non-GAAP diluted net EPS of $1.45 excludes $0.08 for certain non-service pension costs/(benefits), and $0.03 for changes in non-GAAP effective tax rate.

“Hewlett Packard Enterprise delivered another impressive quarter in Q4, concluding a very successful fiscal year 2018 marked by significant transformation and achievement,” said Antonio Neri, President and CEO of HPE. “We excelled in delivering differentiated new capabilities for our customers that drove meaningful top line growth while expanding margins that fueled strong cash flow and shareholder returns. As we close my first fiscal year as CEO, I am incredibly proud of where we stand in the marketplace and of our innovative culture. In 2019, I have great confidence that our experienced global team and proven strategy will accelerate what comes next for our customers from edge to cloud.”

HPE fiscal 2018 full-year and fourth quarter continuing operations financial
performance

FY18 FY17 Y/Y Q4 FY18 Q4 FY17 Y/Y
GAAP net revenue ($B) $30.9 $28.9 6.9% $7.9 $7.7 3.7%
GAAP operating margin 6.0% 2.2%   3.8 pts. 8.6% (2.9%) 11.5 pts.
GAAP net earnings ($B) $2.0 $0.4 361.5% $(0.8) $0.4 (304.2%)
GAAP diluted net earnings per share $1.30 $0.26 400.0% $(0.53) $0.23 (330.4%)
Non-GAAP operating margin 9.0% 7.6%   1.4 pts 10.1% 8.2% 1.9 pts.
Non-GAAP net earnings ($B) $2.4 $1.6 50.4% $0.7 $0.5 40.6%
Non-GAAP diluted net earnings per share $1.56 $0.96 62.5% $0.45 $0.29 55.2%
Cash flow from operations ($B) $3.0 $1.3 $1.7 $1.3 $0.9 $0.4

Information about HPE’s use of non-GAAP financial information is provided under “Use of non-GAAP financial information” below.

Outlook
For the fiscal 2019 first quarter, Hewlett Packard Enterprise estimates GAAP diluted net EPS to be in the range of $0.19 to $0.23 and non-GAAP diluted net EPS to be in the range of $0.33 to $0.37. Fiscal 2019 first quarter non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.14 per diluted share, primarily related to transformation costs and the amortization of intangible assets.

For fiscal 2019 full-year, Hewlett Packard Enterprise maintains the GAAP diluted net EPS range of $0.73 to $0.83 and the non-GAAP diluted net EPS range of $1.51 to $1.61. Fiscal 2019 non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.78 per diluted share, primarily related to transformation costs, the amortization of intangible assets, and an adjustment to earnings from equity interests.

Fourth Quarter Fiscal Year 2018 Segment Results

  • Intelligent Edge revenue was $814 million, up 17% year over year and up 15% when adjusted for currency, with 10.1% operating margin. HPE Aruba Product revenue was up 17%, up 15% when adjusted for currency, and HPE Aruba Services revenue was up 16%, up 16% when adjusted for currency.
  • Hybrid IT revenue was $6.4 billion, up 5% year over year and up 4% when adjusted for currency, with 11.9% operating margin. Compute revenue was up 9%, up 7% when adjusted for currency, Storage revenue was up 6%, up 4% when adjusted for currency, DC Networking revenue was up 2%, down 1% when adjusted for currency, and HPE Pointnext revenue was down 3%, down 3% when adjusted for currency.
  • Financial Services revenue was $939 million, down 7% year over year and down 5% when adjusted for currency, net portfolio assets were flat year over year, and financing volume was up 8% year over year. The business delivered an operating margin of 7.8%.

About Hewlett Packard Enterprise
Hewlett Packard Enterprise is a global technology leader focused on developing intelligent solutions that allow customers to capture, analyze and act upon data seamlessly from edge to cloud. HPE enables customers to accelerate business outcomes by driving new business models, creating new customer and employee experiences, and increasing operational efficiency today and into the future.

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