Tag Archives: technology

Hewlett Packard Enterprise Edges EPS Views, Outlook Meets, Stock Up

Hewlett Packard Enterprise ( HPE ) late Thursday edged above earnings-per-share expectations for its fiscal Q1 ended Jan. 31, met on revenue and roughly met views with its Q2 earnings guidance, while also promising to return more capital to shareholders. For Q1, the company posted EPS ex items of 41 cents, down 6.8% from pro forma earnings of 44 cents a share in the year-earlier quarter. Sales fell 3% to $12.7 billion. For Q2, HPE expects EPS ex items of 39 cents to 43 cents. It didn’t give revenue guidance. “All in all, the headline news looks like a solid report from a top/bottom-line perspective,” Daniel Morgan, a vice president of HPE shareholder Synovus Trust, told IBD via email. On Wednesday, the company filed with the SEC to change its pro forma figures for the year-earlier quarter, which it issued after its Nov. 1 split from the legacy Silicon Valley pioneer Hewlett-Packard Co. HPE contains the business software and services, servers, storage and cloud-migration operations of the old company, with the new HP Inc. ( HPQ ) taking the PC and printer business. HPE now has more freedom to battle broad-based business-technology providers such as IBM ( IBM ), Cisco Systems ( CSCO ) and Oracle ( ORCL ). HPE changed its year-earlier figure for EPS minus items to 44 cents, from 48 cents. It didn’t change its pro forma revenue figure. Analysts polled by Thomson Reuters had expected adjusted EPS of 40 cents for fiscal Q1, though it’s unclear if that consensus estimate would have changed with the new pro forma figure. Analysts expected revenue of $12.68 billion. For Q2, analysts had modeled EPS ex items of 42 cents on sales of $12.3 billion. The company’s fiscal 2016 EPS ex items guidance of $1.85 to $1.95 met the views of analysts polled by Thomson Reuters. And HPE maintained its fiscal 2016 guidance on free cash flow — cash from operations minus capital expenditures — of $2 billion to $2.2 billion. HPE stock was up nearly 7% in after-hours trading, following the earnings release. Shares fell 2.2% to 13.60 in the regular session on the stock market today . The stock, which debuted in early November, peaked Dec. 1 at 15.88. Looking for ways to speed growth and improve shareholder value, the Hewlett-Packard split came in the face of faster-growing competition from upstarts leading the way to cloud computing. Last week, HP Inc. said its Q1 EPS and sales each fell 12%, to 36 cents and $12.2 billion. HPE Says Sales In Constant Currency Rose For All Segments “During our first quarter as an independent company, we saw the progress that comes from being more focused and nimble,” HPE CEO Meg Whitman said in the company’s earnings release. Whitman also serves as chair of HP Inc. and had been CEO and chairwoman of the former Hewlett-Packard Co. before engineering the split-up. “We delivered a third consecutive quarter of year-over-year constant-current revenue growth, and excluding the impact of recent M&A activity, we saw revenue growth in constant currency across every business segment for the first time since 2010,” she said. Revenue rose 4% year over year in constant currency, the company said. HPE CFO Tim Stonesifer said in the earnings release that the company will “return at least 100% of our free cash flow outlook to shareholders” in fiscal 2016, after devoting $1.3 billion to share repurchases and dividends in Q1. The networking business was the clear winner last quarter, and in fact the only business that notched revenue growth. The company said its Enterprise Group overall rose 1% to $7.1 billion in revenue, with a 13.4% operating margin. Networking sales jumped 54% from the year-earlier quarter — more than 60% in constant currency — but storage revenue fell 3%, and tech services tumbled 9%. Also slipping were server sales, albeit by just 1%. Before the release, shareholder Morgan, of Synovus Trust, told IBD he was “looking for stabilization in areas of weakness (by) expecting strength in servers into next year, as cloud and Big Data growth spur purchases. Servers represents 48% of the Enterprise (Group) segment’s revenue and was (up) 5% year-to-year last quarter.” HPE’s separate Enterprise Services segment sales fell 6% to $4.7 billion, the company said. Infrastructure tech outsourcing sales fell 8%, while application and business services revenue slipped 3%. Software services fell 10% to $780 million. License revenue fell 6%, support fell 13%, professional services revenue contracted 7%, and software as a service (Saas) sales fell 9%. Financial services, which help customers pay for their purchases, fell 3% to $776 million. In its filing with the SEC on Wednesday, the company said the main differences with its new pro forma EPS number for the year-earlier quarter “are related to cash acquired and debt incurred by HPE just prior to the distribution (of new shares to old shareholders). The primary differences between the previously provided figures and adjusted cash flow from operations and adjusted free cash flow are related to prepaids, deposits and liabilities associated with property, plant and equipment, pension obligations and income tax asset and liabilities that transferred to HPE from its former parent just prior to the distribution.”

Amazon Bets New Gear In Voice Control Fight Vs. Google, Apple

Amazon.com ( AMZN ) is doubling down on its voice-control tech Alexa as it wages a prolonged battle against  Apple ( AAPL ), Google and others for a greater share of customer attention. The mighty, Seattle-based e-commerce firm announced Thursday that it was giving Alexa two new pieces of hardware that will beef up its roster of offerings. The voice-controlled household assistant will gain Amazon Tap  and the Echo Dot. Tap is a smaller, portable version of Amazon’s original Echo speaker, which works like other Wi-Fi speakers to play music but also serves as Alexa’s cyber ears and voice. Unlike the Echo, Tap doesn’t need an electric outlet — it runs on a rechargeable battery. Like its larger sibling, Tap connects to phones and the Internet via Wi-Fi and Bluetooth. The Alexa-powered Tap requires people to press a button prior to commanding it to do things like order a ride via app-based car service Uber, read e-books and the news, and provide weather reports. Alexa can also operate, via voice commands, the growing number of “connected” home devices such as thermostats and lights, and perform dozens of other tasks. Tap will begin shipping at the end of March for $130. Amazon also announced the hockey-puck-like Echo Dot , which is basically a miniaturized version of its Echo without a large, high-quality speaker. It has a built-in smaller speaker along with a microphone and can connect to existing speaker systems via wire, or wirelessly by Bluetooth. Amazon is limiting Dot sales to existing Echo or Amazon Fire TV device owners; to get one, people will have to ask Alexa. Amazon’s stock was down a fraction to around 576 in afternoon trading on the stock market today . Amazon stock has an IBD Composite Rating of 80, where 99 is the highest. The stock more than doubled in 2015 but much like the rest of the market had a rocky start to 2016. But as the market has rebounded, Amazon stock has surged around 20% since Feb. 9. Executives have not disclosed to investors exactly how successful Amazon’s foray into voice-control tech is, but according to a Business Insider report , Echo vastly outsold the rest of the wireless speaker market in 2015. Amazon lists Echo as its #1 best seller in the home audio speakers section of its e-commerce site and notes that while Echo is available for orders now, it won’t actually be in stock again till March 12. The device debuted in 2014. Echo’s runaway success is not good news for other firms making voice-control plays. Apple, for example, has Siri — though unlike the Alexa-powered Echo, people must hit a button before activating Siri. Google has built a similar feature into its search engine and Android operating system. To activate the Google voice controller, people say, “O.K., Google” and proceed to command it to perform functions like setting appointments and timers. Google is a unit of Alphabet ( GOOGL ). Microsoft ( MSFT ) also has developed a virtual personal assistant called Cortana.

Google Fiber Bark Worse Than Market Bite For Comcast, AT&T: Report

Google Fiber had only 53,390 TV customers as of Dec. 31, said a MoffettNathanson report, which added that parent Alphabet ’s ( GOOGL ) public relations bounty from the service is “wildly out of all proportion” to its actual market share gains vs. AT&T ( T ) and other cable TV players. The Google unit sells high-speed Internet and TV services in four markets and has trumpeted expansion plans. Google Fiber bundles video and gigabit-per-second broadband service for $130 monthly and also sells stand-alone Internet for $70 monthly. Google Fiber is currently available in Austin, Texas; Provo, Utah; Kansas City, Mo., and neighboring Kansas City, Kan. Google announced plans early in 2015 to expand the service to San Antonio; Nashville, Tenn.; Atlanta; Charlotte, N.C.; Raleigh-Durham, N.C.; and Salt Lake City. It’s also deep in talks with other potential markets. Telecom companies have been alarmed over Alphabet-owned Google Fiber’s recent spate of announcements. AT&T in February sued Louisville, Ky., over a new law that would make it easier for companies like Google Fiber to install gigabit Internet networks using existing utility poles. Comcast ( CMCSA ) in early February stepped up its marketing in Atlanta in anticipation of Google Fiber’s arrival. MoffettNathanson analyst Craig Moffett says Google Fiber likely has more broadband customers than TV subscribers, but the firm’s study didn’t track broadband. Still, he says that Google Fiber’s relatively few TV customers, based on data from the U.S. Copyright Office, raises questions over the media hype the service has garnered. “The addition of less than 12,000 subscribers over the span of six months for a service that has generated this kind of fanfare isn’t terribly impressive,” wrote Moffett. Alphabet hasn’t given any subscriber figures for Google Fiber, nor any financials. The business is grouped in its quarterly earnings into what Alphabet calls its “other bets” — basically including all businesses other than the core Google units. Google has been in talks with local governments in Portland, Ore., San Jose, Calif., and Phoenix to expand its service to those markets. In late 2015, Google Fiber said it might enter Chicago or Los Angeles. And in late February, Google Fiber said San Francisco was also on its expansion list. “Google has made a number of splashy announcements. Taken together, they have a rather provisional feel, as if the company is still experimenting,” Moffett wrote. “Each market is different, and seemingly intentionally so. The goal doesn’t seem to be how much ground they can cover. It seems to be how many different business models they can showcase.”