Hewlett Packard Enterprise: Revenue Growth and Profit Margins
Revenue expected to remain flat in fiscal 2017
Analysts expect Hewlett Packard Enterprise’s revenue to rise 1% YoY (year-over-year) to $33.4 billion in fiscal 2017, compared with revenue of $33.1 billion in fiscal 2016. HPE’s revenue is then expected to fall 12.7% YoY in fiscal 2018 to $29.2 billion.
HPE’s non-GAAP (generally accepted accounting principles) EPS (earnings per share) could fall 8.6% YoY in fiscal 2017 to $1.38, and 13.8% YoY to $1.19 in fiscal 2019. Analysts expect revenue of peers Nokia (NOK), IBM (IBM), and NetApp (NTAP) to change -2.9%, -1.6%, and 2.7%, respectively, in their next fiscal years.
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Analysts expect HPE to post a net margin of -0.08%, with an operating margin of 8.6%, in fiscal 2017. The company reported a net margin of 6.3%, with an operating margin of 9% in fiscal 2016.
Profit margins are, however, expected to expand in 2018 and 2019, driven by HPE’s rise in operational efficiency. While analysts expect HPE’s revenue to fall 12.7% in 2018, its net margin is expected to rise to 3.2%, with an operating margin of 9%. HPE’s operating margin and net margin are expected to be 4% and 9.3%, respectively, in 2019, with revenue growth of 0.3% YoY. Peers NetApp (NTAP), IBM (IBM), and Nokia (NOK) had operating margins of 9%, 16.4%, and 9.2%, respectively, at the end of their last reported fiscal quarters.