Hewlett Packard Enterprise (HPE 17.93, -0.88) is down 4.7% after reporting in-line earnings and issuing mixed guidance.
The company reported in-line second quarter earnings of $0.35 per share on a 22.1% year-over-year decline in revenue to $9.90 billion, which was ahead of market expectations.
Revenue from continuing operations declined 13.0% year-over-year to $7.40 billion.
Enterprise Group revenue fell 13.0% year-over-year to $6.20 billion in response to declines in all sub-segments. Servers revenue fell 14.0%, Storage revenue declined 13.0%, Networking revenue fell 30.0%, and Technology Services revenue ticked down 2.0%. Segment operating margin fell 300 basis points to 8.8%.
Software revenue fell 11.0% to $685 million. License revenue fell 29.0% while Support revenue declined 4.0%. Professional Services revenue fell 17.0% while Software-as-a-Service revenue increased 3.0%. Segment operating margin expanded 160 basis points to 26.4%.
Financial Services revenue grew 11.0% year-over-year to $872 million while operating margin declined 40 basis points to 8.9%.
Looking ahead, the company expects a soft third quarter, priming the market for below-consensus earnings between $0.24 per share and $0.28 per share. However, Hewlett Packard Enterprise expects a pick-up later in the year, reaffirming full-year guidance for earnings between $1.46 per share and $1.56 per share.