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A Long Road Ahead for HP Enterprise

Despite mixed first-quarter results, management is doing a decent job of strategically positioning the company in the face of a dramatically changing operating environment due.

Revenue in the fiscal first quarter was $11.4 billion, which represented a 10% year-over-year decrease and a 9% decrease sequentially. The Enterprise Group declined by 12% year over year as servers and storage reported low-double-digit declines. Management indicated the large decline was the result of currency headwinds, commodities pricing constraints, and execution issues. However, the company’s all-flash storage portfolio grew by nearly 30% year over year, which we view as a positive given this is a key growth area for the company. Further, networking revenue was up 6% year over year when adjusted for divestitures and foreign exchange effects.

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About the Author

Timothy Feeney

Equity Analyst

Tim Feeney is an equity analyst for Morningstar, covering consumer and enterprise hardware companies.

Before joining Morningstar in 2016, Feeney worked in investment management for Madison Capital Funding LLC. Previously, he was an analyst for Grant Thornton, where he performed valuation services.

Feeney holds a bachelor’s degree in economics and finance from Miami University of Ohio. He is a Level 2 candidate in the Chartered Financial Analyst® Program.

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