Hewlett Packard Enterprise (HPE) has reported a 78.19 percent plunge in profit for the quarter ended Oct. 31, 2016. The company has earned $302 million, or $0.18 a share in the quarter, compared with $1,385 million, or $0.75 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $1,035 million, or $0.61 a share compared with $1,008 million or $0.55 a share, a year ago. Revenue during the quarter dropped 7.21 percent to $12,478 million from $13,448 million in the previous year period. Gross margin for the quarter expanded 73 basis points over the previous year period to 30.37 percent. Total expenses were 93.77 percent of quarterly revenues, down from 99.12 percent for the same period last year. This has led to an improvement of 534 basis points in operating margin to 6.23 percent.
Operating income for the quarter was $777 million, compared with $119 million in the previous year period.
However, the adjusted operating income for the quarter stood at $1,391 million compared to $1,295 million in the prior year period. At the same time, adjusted operating margin improved 152 basis points in the quarter to 11.15 percent from 9.63 percent in the last year period.
"FY16 was a historic year for Hewlett Packard Enterprise," said Meg Whitman, president and chief executive officer of Hewlett Packard Enterprise. "During our first year as a standalone company, HPE delivered the business performance we promised, fulfilled our commitment to introduce groundbreaking innovation, and began to transform the company through strategic changes designed to enable even better focus, flexibility and financial performance."
For financial year 2017, Hewlett Packard Enterprise forecasts diluted earnings per share to be in the range of $0.72 to $0.82. The company forecasts diluted earnings per share to be in the range of $2 to $2.10 on adjusted basis.
For the first-quarter 2017, Hewlett Packard Enterprise forecasts diluted earnings per share to be in the range of $0.03 to $0.07. On an adjusted basis, the company forecasts diluted earnings per share to be in the range of $0.42 to $0.46.
Operating cash flow improves significantly
Hewlett Packard Enterprise has generated cash of $4,958 million from operating activities during the year, up 35.43 percent or $1,297 million, when compared with the last year. Cash flow from investing activities was $419 million from investing activities during the year as against cash outgo of $5,413 million in the last year. It has incurred net capital expenditure of $2,830 million on net basis during the year, down 4.52 percent or $134 million from year ago.
The company has spent $2,232 million cash to carry out financing activities during the year as against cash inflow of $9,275 million in the last year period.
Cash and cash equivalents stood at $12,987 million as on Oct. 31, 2016, up 31.95 percent or $3,145 million from $9,842 million on Oct. 31, 2015.
Working capital drops significantly
Hewlett Packard Enterprise has witnessed a decline in the working capital over the last year. It stood at $6,386 million as at Oct. 31, 2016, down 29.22 percent or $2,636 million from $9,022 million on Oct. 31, 2015. Current ratio was at 1.28 as on Oct. 31, 2016, down from 1.41 on Oct. 31, 2015.
Cash conversion cycle (CCC) has decreased to 14 days for the quarter from 22 days for the last year period. Days sales outstanding went down to 36 days for the quarter compared with 39 days for the same period last year.
Days inventory outstanding has decreased to 9 days for the quarter compared with 11 days for the previous year period. At the same time, days payable outstanding went up to 31 days for the quarter from 28 for the same period last year.
Debt moves up marginally
Hewlett Packard Enterprise has witnessed an increase in total debt over the last one year. It stood at $16,140 million as on Oct. 31, 2016, up 2.19 percent or $346 million from $15,794 million on Oct. 31, 2015. Total debt was 20.26 percent of total assets as on Oct. 31, 2016, compared with 19.43 percent on Oct. 31, 2015. Debt to equity ratio was at 0.51 as on Oct. 31, 2016, up from 0.47 as on Oct. 31, 2015. Interest coverage ratio deteriorated to 8.27 for the quarter from 13.22 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
