Investing.com -- Hewlett Packard Enterprise Co (NYSE:HPE) shares tumbled 13.8% in after-hours trading on Wednesday after the company reported mixed first-quarter results and provided disappointing guidance, while also announcing job cuts.
The enterprise technology company reported adjusted earnings per share of $0.49 for the first quarter, missing analyst estimates of $0.50. Revenue came in at $7.85 billion, slightly above the consensus of $7.81 billion and up 16% YoY.
However, HPE's outlook overshadowed its quarterly performance. The company forecasts second-quarter adjusted EPS of $0.28-$0.34, well below analyst expectations of $0.50. Revenue guidance of $7.2-$7.6 billion also fell short of the $7.93 billion consensus.
For fiscal 2025, HPE projects adjusted EPS of $1.70-$1.90, significantly lower than the $2.13 analysts were expecting. The company expects revenue growth of 7-11% in constant currency, with non-GAAP operating profit growth between -10% and 0%.
Adding to investor concerns, HPE announced a cost reduction program aimed at cutting structural operating costs. The plan involves workforce reductions and is expected to deliver gross savings of approximately $350 million by fiscal 2027.
"HPE achieved our fourth consecutive quarter of YoY revenue growth, increasing revenue by double digits in Q1," said Antonio Neri, president and CEO. "I am confident in our ability to keep winning in the market, which will, in turn, drive shareholder returns."
Despite the positive revenue growth, HPE's gross margins declined significantly, with non-GAAP gross margin falling 680 basis points YoY to 29.4%.
The company's Server segment saw strong growth, with revenue up 29% YoY to $4.3 billion. However, the Intelligent Edge segment experienced a 5% YoY decline in revenue to $1.1 billion.